Renationalization of EDF: the AMF responds to small shareholders and specifies the timetable

The Autorité des marchés financiers (AMF) has explained the reasons for its decision to small shareholders.
Autorité des marchés financiers (AMF)

In its opinion on the conformity of the project of renationalization of EDF by the French State, the Autorité des marchés financiers (AMF) explained the motivations of its decision to the small shareholders, who criticize this operation.

On Tuesday, the French stock market regulator gave the green light to this operation. It specifies the reasons for and the timetable of the simplified takeover bid.

The acquisition of the shares will take place from November 24 to December 22, a window that has been shifted from the dates initially planned due to the postponement of the AMF’s compliance decision. It took the authority three meetings to review the file and make its decision.

The AMF returns in particular to the challenges expressed by small EDF shareholders, mostly employees and former employees, who protest against the “favorable” opinion taken on October 27 by the board of directors (CA) of EDF concerning the renationalization of the group and especially the price of 12 euros per share, proposed by the State, considered too low.

A report by an independent expert presented to the Board of Directors validated this price.

These shareholders, who together hold less than 1.5% of the capital, are demanding a minimum of 15 euros per share instead of 12.

According to the AMF, the independent expert’s method of financial analysis is “particularly well suited to the characteristics” of EDF, as it takes into account “the very different activities and markets” in which the energy company operates and “its business prospects”. The conclusions of this report concerning the offer price are therefore consistent with the stock exchange authorities.

In addition, the authority recalls that any “decisions taken by the French State in its regulatory role in the energy sector” were “clearly identified over time in the company’s documentation as risk factors”, and cannot be ignored by the shareholders.

Concerning the favorable opinion given by the EDF board of directors, the AMF does not mention any irregularity but recalls that it is “not empowered by any text to rule on the regularity of the deliberations at the end of which a board of directors gives its reasoned opinion on a public offer”.

In mid-July, the French government made official its intention to take 100% control of the French energy company, of which it already owns 84%.

This €9.7 billion transaction is strategic for the French government, which wants to build six new-generation EPR nuclear reactors, with an option for eight more, and also aims to send a signal of confidence to debt investors.

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