France’s finance ministry said on Tuesday it had offered 9.7 billion euros, or 12 euros per share, to buy the 16 percent of debt-laden EDF it doesn’t already own. The government of French Prime Minister Elizabeth Bourne is trying to boost domestic energy supplies amid concerns about the finances of the energy company, which is also building the Hinkley Point C nuclear power station in Somerset. Ministers want to take steps to prevent energy bills from soaring even higher amid a gas supply crisis in Europe, caused in large part by strained relations with major supplier Russia over its invasion of Ukraine. The offer of 12 euros per share is a 53% premium to the closing value of 7.84 euros for EDF shares on July 5, the day before Borne’s nationalization was announced. It’s also more than the €8bn price tag that emerged last week. EDF shares, which had been suspended since July 13 while investors awaited details of the government’s plan, jumped 15 percent to 11.80 euros, valuing the company as a whole at 45.4 billion euros. “The price is at the high end of the range considering peers and market conditions,” said Gregory Lafitte, an analyst at Tradition. Lafitte added that most estimates for the bid price ranged from €10.50 to €12.50. The investments of almost 10 billion euros represent a significant part of the French government’s spending. The country’s state budget last year exceeded 400 billion euros, including 60 billion euros for defense spending and 61 billion euros for state pensions. Holders of the company’s convertible debt will be offered 15.64 euros for each bond, and the final bid for the EDF share will be submitted to the Autorité des Marchés Financiers by early September. The nationalization offers some certainty to EDF’s finances at a critical time for the company. Longtime chairman and chief executive Jean-Bernard Lévy, 67, is expected to step down in September. EDF’s nuclear generation accounted for 69% of France’s electricity supplies in 2021. But that level of supply is expected to fall to its lowest level in more than three decades this year due to a combination of maintenance, refueling and repairs at 12 reactors. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Separately, France agreed a long-term energy deal with the United Arab Emirates on Monday for fuel and gas supplies as it moves to reduce its reliance on Russian gas, which accounted for about 17% of its gas supplies before the war. In the UK, a delayed planning decision on the future of the proposed EDF-backed Sizewell C nuclear power station is due to be announced by the government on Wednesday. Hinkley Point C is not expected to be operational until 2027 due to construction delays.
