France to pay nearly €10bn to fully nationalise EDF

theguardian.com:

The French government is poised to pay nearly €10bn (£8.5bn) to fully nationalise EDF as ministers attempt to tackle the European energy crisis.

The French finance ministry said on Tuesday it had offered €9.7bn or €12 a share to buy the 16% of debt-laden EDF it does not already own.

The government of the French prime minister, Elisabeth Borne, government is trying to shore up domestic energy supplies amid concerns over the finances of the energy company, which is also building the Hinkley Point C nuclear power station in Somerset.

Ministers want to take action to keep energy bills from soaring even higher amid a gas supply crunch in Europe, caused largely by soured relations with big supplier Russia over its invasion of Ukraine.

The €12-a-share offer is a premium of 53% to the closing value of €7.84 for EDF shares on 5 July, the day before Borne announced the nationalisation. It is also more than the €8bn price tag that emerged last week.

Shares in EDF, which had been suspended since 13 July while investors awaited the details of the government plan, jumped 15% to €11.80, valuing the whole company at €45.4bn.

“The price is on the high range level taking into account peers and market conditions,” said Gregory Lafitte, an analyst at Tradition. Lafitte added that most estimates for the offer price had ranged from €10.50 to €12.50.

The near-€10bn investment represents a sizeable chunk of French government spending. The country’s state budget last year surpassed €400bn, including €60bn on defence spending and €61bn on state pensions.

Holders of the company’s convertible debt will be offered €15.64 for each bond, and the final offer for EDF stock will be submitted to Autorité des Marchés Financiers by early September.

The