The logo of EDF, whose capital was opened in 2005 and which the government wants to renationalise (AFP/Archives/DENIS CHARLET)
The title of EDF was suspended on Wednesday on the Paris Stock Exchange, the time to allow the State to specify the terms of the renationalization of the energy company announced in early July.
“Following the announcements of the Prime Minister, and after discussions with the Financial Markets Authority, EDF SA has requested the suspension of the listing of its capital securities until further notice”, specifies the group in a press release. .
“The State is currently carrying out the work to define the terms and will specify its intentions no later than July 19, 2022 before the stock market,” said Bercy for his part in a press release. The EDF share can therefore no longer be exchanged, and its price remains fixed at its close on Tuesday, at 10.23 euros.
To withdraw EDF from the Paris Stock Exchange, the French State will have to make a public purchase offer (OPA) in order to acquire the 16% of shares that it does not yet hold.
– The right price –
Prime Minister Elisabeth Borne at the National Assembly, July 11, 2022 (AFP/BERTRAND GUAY)
In this context, he must announce the price at which he undertakes to buy back the shares. This is the information that investors have been waiting for since the announcement by the Prime Minister of the renationalisation of EDF in her general policy statement before the National Assembly on July 6.
During a takeover bid, the buyer must convince the current holders of shares to sell them to him. For this, he must most often agree to pay more expensive shares than their last stock market price, an attractive “premium” for investors.
According to the Journal des OPA, which recorded 41 operations last year, the premium averaged 38.4% in 2021.
Most often, the initiator of the takeover bid gives the buyback price of the share at the same time as his intentions to buy: the stock market price then adjusts immediately to approach the desired share price.
For example, after the announcement in October 2021 by the Banque Postale to withdraw CNP assurance from the Paris Stock Exchange, by buying back the remaining shares at 21.90 euros, the title of CNP Assurances had jumped the next day by 35% to reach 21 .70 euros at closing.
The Minister of the Economy Bruno Le Maire, in Versailles on July 11, 2022, on the occasion of the “Choose France” summit (POOL/AFP/Archives/Ludovic MARIN)
But neither the Prime Minister nor Bercy have yet formally specified the amount that would be devoted to this operation for EDF.
The Minister of the Economy Bruno Le Maire has planned an envelope of 12.7 billion euros which includes the renationalization of EDF but also “possible other operations.”
The stock market price is therefore particularly sensitive to rumors and press information from one session to the next. Since the announcement of the renationalisation, EDF’s share price (at 7.84 euros at the close of July 5) has already taken more than 30%.
In a note published on Tuesday, Morgan Stanley analysts were considering a price of 12.60 euros per share for the operation, a premium of 60% compared to the price on July 5.
Jefferies analysts think they have a range that goes up to 12.5 euros per share.
– An eventful adventure on the stock market –
A person interested in reserving EDF shares inquires at a branch of the savings bank on November 2, 2005 in Caen, Normandy (AFP/Archives/MYCHELE DANIAU)
Once the government’s intentions are known, the title will be able to resume its quotation before its probable future disappearance from the quotation in the coming months.
Seventeen years after the opening of its capital and its IPO at the end of 2005, the electrician remains largely public, owned by the State at nearly 84%, by employees who own 1% and by institutional shareholders. and individuals for the remaining 15%.
The electrician had been introduced on the stock market at a price of 32 euros per share. After a difficult first few months, the share seemed to convince investors, and peaked just above 75 euros at the end of 2007.
But the group’s debt, which could reach 60 billion euros in 2022, the costs of renovating the nuclear fleet or even the government’s decision to make it sell more cheap electricity to its competitors have weighed on the price, which is even briefly fell below 7 euros in March.
© 2022 AFP
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