President Macron’s government has offered €9.7 billion (£8 billion) to complete a full nationalisation of EDF, the French state energy giant that is involved in the UK’s nuclear build programme.
The move, which came a fortnight after Macron’s ministers unveiled plans for the state to buy the 16.2 per cent of EDF it does not already own, was backed by analysts but angered minority shareholders.
EDF is leading the construction of a new nuclear plant at Hinkley Point in Somerset for an estimated £26 billion and is also in talks with the government over plans for another £20 billion station at Sizewell in Suffolk.
The French government has offered €12 a share to take 100 per cent control of EDF, which represents a 53 per cent premium in comparison with the stock market price before the announcement of the full nationalisation.
“We think the offer looks attractive and has high probability of success,” Piotr Dzieciolowski, an analyst at Citi investment bank, said in a note.
But critics pointed out that investors had paid €32 a share when the electricity giant was partially privatised in 2005. Many said the state had sacrificed minority shareholders by forcing EDF to follow politically motivated policies in the intervening 17 years.
Colette Neuville, of the Association for the Defence of Minority Shareholders, said: “The fall in the share price results to a great extent from the decisions that the state has taken in the general interest.
“We are not criticising those decisions but . . . this is incompatible with the rules of corporate governance in a private company,” added Neuville, who urged the cabinet to pay €32 a share. She said she would file a formal request for the Financial Markets Authority to block the buyout at €12 a share.
Energie, an association of EDF staff with shares in the group, backed her arguments, saying it planned to sue the state for “putting the firm into difficulty”. The lawsuits are likely to focus on Macron’s decision to curb energy prices in France by forcing EDF to sell electricity to its rivals at a discount, which has cost the company €10.2 billion.
The group, which had a €44 billion debt at the end of 2021, says it will lose a further €18.5 billion this year because about half its 56 reactors in France are out of service due to maintenance and the discovery of corrosion.
Bruno Le Maire, 53, the economy minister, said the full nationalisation would enable EDF to push ahead with Macron’s plan to build six new reactors at a cost of €46 billion. The head of state says it will enable France to cut greenhouse gas emissions while protecting it from the risk of dependence on foreign energy from countries such as Russia.
Proponents of the full nationalisation say it makes sense at a time when EDF is in financial crisis, with its ageing reactors, which supply about 70 per cent of French electricity, in need of renewal. They point out that France, normally an electricity exporter, is importing energy from Spain, Switzerland, Germany and Britain.
“Nationalisation is ultimately the only way to save the company and ensure electricity production,” said Ingo Speich, head of sustainability and corporate governance at Deka Investment, which has a small stake in EDF. “This is a bitter but necessary step.” But Le Figaro, the French newspaper, said EDF would still “need to be recapitalised. And there will be only one shareholder to do it, the [French] taxpayer”.
