EDF: the stock market policeman reopens the takeover bid after the decision of the Court of Appeal

Disappointment for small holders of EDF who hoped to obtain a better price for their shares: justice rejected their appeal on Tuesday, allowing the Financial Markets Authority (AMF) to relaunch the same day the process of total renationalization of the energy company. This renationalisation, announced last July by Prime Minister Elisabeth Borne and costing 9.7 billion euros, is strategic for the State shareholder, which already held, before the takeover bid, 84% of the national electric flagship.

The goal of the public authorities: to spare EDF the constraints of the Stock Exchange to enable it to revive nuclear power more quickly by financing the extension of an aging fleet, at a time when Russian gas is lacking, and the construction in the coming decades of at least six new reactors. "In a judgment delivered today, the Paris Court of Appeal rejected the appeal brought by minority shareholders of EDF against the decision of the Autorité des marchés financiers (AMF) of November 22, 2022 which declared the offer to be compliant. public simplified acquisition of the State on the titles EDF”, made known the court in a press release.

Like the AMF, the magistrates considered “that the information note from the State on its draft offer and the note in response from EDF to this draft had been drawn up in compliance with the principles of equality treatment of shareholders and market transparency”. Consequence of this decision: the AMF announced as planned, a few hours after the court's decision, the reopening of the takeover bid process. This allows shareholders who still own EDF shares to sell them, from May 4 to 17, the date of the final closing of the operation, to the French State, which already holds almost 96% of the capital of the society.

The court also argued that the independent expert “had verified that the price of the offer proposed by the State was fair, after having assessed the company EDF according to a multi-criteria approach provided for by the regulations of the AMF”. It thus undermines the main reason for protest brandished by the employee and retired shareholders of EDF who, for months, have been contesting by multiple appeals, namely the price of 12 euros per share set by the State.

The plaintiffs demanded a minimum of 15 euros, whereas when the energy company opened its capital in 2005, the action was worth 32, with a 20% discount for employees at 25.60 euros. "These 12 euros are deeply unfair, with regard to an expropriation at the worst time in the history of EDF, but also the assumptions made by the independent expert in his assessment", reacted to AFP Martine Faure, leader of the employee shareholders of EDF at the origin of the appeal.

Saying she was "disappointed" by this decision, she indicated that the mutual fund supervisory board that she chairs would meet on Friday "to decide on the follow-up to be given". The shareholders she represents believe that the company is undervalued and that its revenues have been penalized by a mechanism imposed by the State (Arenh), forcing it to sell its nuclear electricity at low prices to industrialists and alternative providers.

EDF also faced serious corrosion problems in its reactors which caused its production to fall in 2022 and widened its financial losses. "The decision to renationalize was taken in the worst year that EDF has known since its creation in 1946", had also underlined at the hearing at the end of March Florent Segalen, the lawyer for the employee and retired shareholders of EDF.

The plaintiffs also considered that Jean-Bernard Lévy, then CEO of EDF, should not have taken part in the vote of the EDF board of directors, which issued a favorable opinion on the takeover bid. In question: the accumulation of his functions as censor on the board of directors of Societe Generale, one of the two establishments appointed by the State to present the offer, with his status as leader of the group appointed by the executive. The court dismissed these grievances, considering that the note produced by EDF, after a favorable opinion from the board of directors, “assured full information of the market on the conditions under which” the latter “had adopted its opinion”.