The State crosses the threshold of 90% of EDF, a crucial threshold for the renationalization

Europe 1 with AFP 2:05 p.m., January 21, 2023

A turning point but not the end of the soap opera: the French State has crossed the threshold of 90% of the capital of EDF, a crucial step to carry out a public takeover bid (OPA) intended to renationalise the electricity giant to relaunch it, but the outcome of which still depends on a court decision.

"On January 19, 2023, the State crossed the threshold of 90.00% of the capital and theoretical voting rights of the company EDF", indicates a press release from the Ministry of the Economy published on Friday.

The State wants to build six new generation EPR reactors

The operation, costing 9.7 billion euros, is strategic for the State, which wants to build six new generation EPR nuclear reactors, with an option for eight others.

On the stock market, this is a decisive step taken by the State in the context of its takeover bid, the deadline for which had been postponed indefinitely due to a legal action. minority shareholders.

From now on, at the end of the offer, he will be able to initiate a compulsory withdrawal of EDF shares from the Paris Stock Exchange, that is to say force the remaining minority shareholders to sell their shares, because they now represent less 10% of the capital and voting rights.

The renationalization is not yet completed

However, the renationalisation, decided last summer when the State held 84% of the capital, has not yet been completed and even seems to have taken a significant delay.

The takeover offer, which opened on November 24, was originally scheduled to close on December 22.

But the AMF decided on December 7 to postpone this deadline "pending the decision of the Paris Court of Appeal on the request for a stay" filed by a group of minority shareholders dissatisfied with the proposed price.

“We see that the situation is getting bogged down, when it would suffice to find an agreement with a price increase that suits all parties, for the appeals to cease and the operations to be carried out successfully” , says Martine Faure, leader of the rebellious small carriers, at the origin of numerous legal actions brought for months.

These small shareholders are mostly employees or former retired employees of EDF, for whom the redemption price, currently set by the State at 12 euros per share, is insufficient.

This price was validated by the report of an independent expert, but the small shareholders believe that the company is undervalued and that it has been unfairly penalized in its revenues by a mechanism imposed by the State (Arenh) l forcing them to sell electricity at low prices to alternative suppliers.

Tense financial situation

The stock market watchdog had authorized the launch of the takeover bid on November 22 on the basis of this report in particular.

But an appeal for annulment of this decision was filed on December 2 before the Paris Court of Appeal, accompanied by a request for a stay of execution.

The hearing to consider this stay is scheduled for January 25.

Another hearing is then scheduled on the merits, on March 23, at the Economic and Financial Regulation Chamber of the Court of Appeal.

"We are on a takeover bid which overall seems to be working. The impact will be relatively minimal", nevertheless estimated with AFP Alexandre Malric, energy director for CGI Business Consulting.

"For me, it's really a non-subject", added Nicolas Goldberg, energy expert at the Colombus consulting firm, according to whom the real issue is "regulation of nuclear selling prices and financing of new" program of EPR reactors desired by the government.

Arenh, initially created to promote the emergence of competition between electricity suppliers, is regularly denounced by EDF as a "poison" weighing on its finances.

The government is working on another device to replace this mechanism, which will end on December 31, 2025. More broadly, the question remains unanswered as to how the State, when it will be sole master on board the company, intends to give EDF the means to build six new-generation EPR nuclear reactors, with an option for eight others.

This project will cost tens and tens of billions of euros, while EDF's finances are burdened by a record debt approaching 60 billion.