Financial Markets Authority gives green light to EDF renationalization

This is an important new step that has just been taken towards the nationalization of the EDF. The Financial Markets Authority (AMF) on Tuesday gave the green light to a plan to take over energy company EDF, launched in early October by the French state, which already owns 84% ​​of the company’s capital. The AMF deemed the draft simplified takeover bid (OPA) filed on Oct. 4 “compliant” with stock market rules, according to a press release issued Tuesday evening.

This project provides for the acquisition from other shareholders of 16% of the capital, which is not yet owned by the state, at a price of 12 euros per share. The acquisition of these securities should take place before December 8, and on Tuesday evening the AIF did not announce a change in the schedule. He intends to publish a “motivated decision as soon as possible.”

Operation worth almost 10 billion

The state shareholder hopes to receive, upon closing the application for the takeover of 90% of the capital, the threshold from which the procedure for forced exit from the stock exchange to recover securities can be launched. The government formalized in mid-July its desire to control 100% of the shares of the French energy company. For the state, which wants to build six next-generation EPR nuclear reactors with an option for eight others, the €9.7 billion operation is strategic and also aims to send a signal of confidence to debt investors.

EDF is in financial difficulty due to a record decline in electricity production, which is a consequence of the unavailability of part of its nuclear fleet due to corrosion problems, scheduled maintenance and public traffic, as well as a tariff shield that protects the French from excessive price increases for energy.

Overall, in 2022, this drop in production will affect EDF’s profitability, amounting to up to 32 billion euros in gross operating profit (Ebitda), and the group’s debt could reach a record total of 60 billion euros at the end of the year.

Angry small shareholders

Since the beginning of the activity, small shareholders (mainly employees and former employees) have been challenging the “positive” opinion of the board of directors of October 27 regarding the renationalization of the group at a price of 12 euros per share and are demanding at least 15 euros.

They have filed several lawsuits, but so far without success. Latest step for today: On Monday they sued EDF for breach of disclosure obligations and conflict of interest against the group’s current president. “We are extremely disappointed that AMF did not take into account all the arguments that we could make, both in substance and in form,” Martin Faure, the leader of these small shareholders, responded, condemning the “complete undervaluation of the company.”

The independent expert, who found the €12 price “fair”, she said, was based on “bad assumptions”, in particular regarding the amount and price of electricity that EDF will sell at low prices to its competitors next year. “What are our remedies today at the French level in this regard? We are looking, in any case we are not going to stop there, ”said Martina Fauré, who also plans to fight at the European level.