A little more time in an uncertain horizon… The Financial Markets Authority (AMF) extended, on Wednesday December 7, the duration of the public purchase offer (OPA) of the French State to completely nationalize EDF, citing legal action by minority shareholders.
“Pending the decision of the Paris Court of Appeal on the request for a stay, the public offer is extended”announces the Constable of the Stock Exchange in a press release. “New information will be published to publicize the modified schedule”, adds the AMF. The period during which the State could make its purchases of shares on the markets was initially due to end on December 22. The AMF’s general regulations allow it to postpone the closing date of a takeover bid “for the duration of the offer”.
Small shareholders of EDF are waging a legal battle on several fronts to prevent the total nationalization of the energy company and challenge its price, currently set by the State at 12 euros per share. This tariff has been validated by an independent expert, as part of a report, but small shareholders believe that the company is undervalued and that its revenues have been unfairly penalized by a mechanism imposed by the State (Arenh) forcing it to sell electricity at low prices to other suppliers.
The stock market policeman, who grants the authorization to launch a takeover bid on the basis of this particular report, had given the green light to the takeover project on November 22, but an appeal accompanied by a request for a stay of execution was filed on December 2 before the Paris Court of Appeal to have this decision annulled.
“Our objective is still to defeat the takeover bid because 12 euros per share does not reflect the value of the company”declared to Agence France-Presse (AFP) Martine Faure, president of EDF in actions, association which represents the first group of minority shareholders of EDF with 1.31% of the capital.
Three remedies
The association filed an appeal jointly with Energie in actions both before the Court of Appeal and the Commercial Court of Paris. On this last aspect, the case must be examined Friday afternoon by three judges, after a first procedural hearing on Monday. “We hope this time to be heard on the merits”underlined Mr.me Faure, elected CFE-CGC of EDF, where she is a financial specialist. Small shareholders demand a minimum of 15 euros per share. Two other associations − EDF Actionnariat Salarié and the Association for the Defense of Employee Shareholders (Adas) − support the process. The second, for its part, filed Monday evening a request to the Council of State.
“In the law on the opening of EDF’s capital, it is provided that any modification must go through the National Assembly. But it is currently the government that has done it”argues Jean-Pierre Lettron, president of this association and former commercial executive of EDF, now retired.
The French state and Bpifrance together held more than 90% of EDF’s voting rights and 86.2% of the capital, according to the latest count made on Wednesday by the AMF. For the takeover bid to be successful and allow the State to initiate a compulsory withdrawal of EDF shares from the stock market, these two thresholds must exceed 90%. The government had formalized in mid-July its desire to control EDF 100%. He then held 84% of the capital. This 9.7 billion euro operation is strategic for the State, which wants to build six new generation EPR nuclear reactors, with an option for eight others, and also aims to send a signal of confidence to debt investors.