The state announced it had crossed the threshold of 90% EDF capital, essential for renationalization

An important step towards the renationalization of the group has just been taken.

Turning point but not the end of the soap opera: The French state has crossed the 90% threshold of the EDF capital, a crucial step towards conducting a public takeover bid (OPA) meant to renationalise the power giant to relaunch it, but the outcome remains up to the courts.

“On January 19, 2023, the State passed the threshold of 90.00% of the capital and theoretical voting rights of EDF companies”, indicated a press release from the Ministry of Economy published on Friday.

The operation, which cost 9.7 billion euros, is strategic for a country that wants to build six new generation EPR nuclear reactors, with an option for another eight.

On the stock market, this is a decisive step taken by the State in the context of a planned takeover (OPA), whose deadline has been postponed indefinitely due to legal actions of minority shareholders.

From now on, at the end of the offering, he will be able to initiate the mandatory withdrawal of EDF shares from the Paris Stock Exchange, meaning forcing the remaining minority shareholders to sell their shares, as they now represent less than 10% of the capital and voting rights.

Rebellious shareholders

However, the renationalization, which was decided last summer when the State controlled 84% of the capital, has not been completed and even appears to be subject to significant delays.

The takeover bid, which opened on Nov. 24, was originally slated to close on Dec. 22. But the AMF decided on December 7 to postpone this deadline “pending the decision of the Court of Appeal of Paris on the request for adjournment” submitted by a group of minority shareholders who were dissatisfied with the proposed price.

“We see that the situation is getting more and more bogged down, when it is enough to find an agreement with an increase in price that is suitable for all parties, for the solicitation to be stopped and the operation to be carried out successfully,” said Martine Faure, leader of the small operators who rebelled, at the origin of many of the actions law that was carried out for months.

These minor shareholders are mostly employees or former employees of EDF, whose 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 small shareholders believe that the company is being unfairly underestimated and has been unfairly penalized in its revenues by mechanisms imposed by the State (Arenh) l forcing them to sell electricity at low prices. prices to alternative suppliers.

Tense financial situation

Stock market watchdogs have authorized the launch of the takeover bid on Nov. 22 based on this report specifically. However, an appeal against this decision was filed on December 2 before the Paris Court of Appeal, accompanied by a request for a stay of execution.

A hearing to consider this stay is scheduled for January 25. Another hearing is then scheduled for March 23, in the Chamber of Economic and Financial Regulation of the Court of Appeal.

“We are in a takeover bid which overall appears to be successful. The impact will be relatively minimal”, but that is forecast by AFP’s Alexandre Malric, energy director for CGI Business Consulting.

“To me, it’s completely non-subject,” added Nicolas Goldberg, an energy expert at consulting firm Columbus, who he said the real issue was “setting nuclear sales prices and financing a new program” of EPR reactors that the government wanted. .

Arenh, which was originally created to promote emerging competition between electricity suppliers, was frequently criticized by EDF as a “poison” burden on its finances. The government is working on another tool to replace this mechanism, which will expire on 31 December 2025.

More broadly, the question remains unanswered as to how the State, when it would be the sole ruler in the company, intends to provide EDF with the means to build six new-generation EPR nuclear reactors, with an option for another eight.

The project will cost tens and tens of billions of euros, while EDF’s finances are burdened by a record debt of close to 60 billion.