17 years after its IPO on the Paris Stock Exchange, EDF will be out soon. The State, which today owns 84% of EDF, in fact presented its draft “simplified” takeover bid (OPA) to the AMF, a first step in the process of withdrawing EDF from the stock market, says AFP.
It should be remembered that given the difficulties of the energy company, the Government announced in July its intention to acquire the 16% of EDF that it does not own. This rest is in the hands of group employees (1%) and minority shareholders (15%).
At what price? The price proposed by the State is 12 euros per share. The total amount of the operation for State finances thus amounts to 9,700 million euros.
An amount well below the value of your share when it was introduced in 2005, which was then 32 euros. “The title even went up to 80 euros per share, it was the star of the CAC”, comments Nicolas Doze, editorial writer for BFM Business. This amount is questioned by certain minority shareholders.
The independent expert appointed by the EDF board now has a maximum of 20 business days to present his opinion on the price proposed by the State. Then, the AMF must give its consent and the State will have about ten days to formally launch its withdrawal offer.
12 euros per share compared to 32 in its presentation
Why return EDF 100% within the State? “The nationalization of EDF gives us every chance to be more independent in the coming years in terms of energy,” Bruno Le Maire said on Thursday. “It is a strong and necessary strategic decision for the country.”
EDF is in great financial difficulty, in particular due to the increase in 20% of the annual electricity fee sold at a reduced price to its competitors to offset rising prices.
Nor can the company implement alone the renewal plan for the nuclear park desired by Emmanuel Macron. The executive aims to build six new EPRs in the country, for a budget of around 60 billion euros. or an amount close to EDF’s net debt expected by the end of the year.
Doctrine
Behind this renationalization hides a larger project. The State will have to redefine the electricity rate doctrine so that EDF’s economic situation improves. Next, it will begin a stage of negotiations with Brussels on the comprehensive reform of the energy sector in France.
The French state will therefore regain control of nuclear energy, but in return the European Commission, which is not opposed to nationalization per se, should ask for concessions to have more competition in other activities in the energy sector.
This should lead to a separation of EDF’s activities, as was supposed the “Hercules” project. The idea would be to split EDF in two. A public entity would oversee non-profit activities, including nuclear activities. A second would bring together renewable activities and electricity distribution. This last part would be put back on the stock market, which should allow EDF and the State to recover some ten billion euros.
Finally, will this renationalization have consequences for customers? In France, the State already decides on electricity prices for individuals through the establishment of regulated tariffs. More than 70% of French households are customers. In the short term, nothing will change for customers.
Source: BFM TV
