EDF’s minority shareholders scramble to challenge nationalisation price

By Julien Ponthus

PARIS (Reuters) – Minority shareholders in EDF are accelerating their efforts to challenge the price set for the nationalisation of the French energy group, believing the government could lodge its takeover offer with the market regulator imminently.

The French government, which already holds 84% of EDF shares, announced in July it would nationalise the utility, a move which will give it more control over a revamp of the debt-laden group while contending with a European energy crisis.

The government offered a premium of more than 50% from the days preceding the announcement, but minority shareholders say it is not enough.

Minority shareholder group ADAM sent a letter to EDF’s Chief Executive Jean-Bernard Levy on Aug. 18, urging a more aggressive approach to the utility’s demand for 8.3 billion euros ($8.24 billion) in compensation after the government capped electricity retail prices in January.

EDF has already filed an indemnification claim. However, ADAM believes only going to court before the takeover offer is lodged would influence the AMF financial market regulator’s thinking when it rules on the buyout.

“This is the week when everything happens”, said ADAM’s head Colette Neuville, who argues EDF investors have unfairly been asked to pay the bill when the government decided to shield consumers from skyrocketing energy prices.

A source close to EDF said going to court now would not alter how the AMF viewed the nationalisation bid, adding that the company planned to do so if its compensation claim was rejected.

EDF declined to comment on Neuville’s request. The AMF said it could not comment on specific cases.

Separately, an association of EDF employee shareholders told Reuters it was stepping up efforts to sue the French state for putting EDF’s financial health in jeopardy.

“We’re working on our objective to lodge our complaint before the state files its bid,” said Herve Chefdeville, general secretary of the Energie en actions association.

French lawmakers earlier this month approved the 9.7 billion euros in financing required for the buyout deal at a 12 euros per share price tag.

EDF shares have been trading between 11.8 euros and 11.9 euros for the past month. The price indicates that merger arbitrage funds currently don’t expect the offer to be sweetened.

EDF floated in 2005 at a price of 32 euros per share.

The government has previously said it plans to launch the nationalisation process in early September. The group holds more than 40 billion euros of debt.

Rising prices have squeezed energy suppliers across Europe, with Uniper, Germany’s biggest importer of Russian gas, requiring a 15 billion-euro state bailout.

($1 = 1.0076 euros)

(Julien Ponthus with Leigh Thomas; Editing by Richard Lough and Jan Harvey)