MAKOR UPDATE EDF
ELECTRICITE DE FRANCE (EDF FP)
Makor view
Last Wednesday July 6th, the French Prime Minister Ms E.Borne during its general political speech declared that the French State will increase its stake in EDF from 83.77% to 100%. The day after, the French Finance Minister B.Le Maire confirmed that the French State will engage EDF’s restructuring with the aim of delisting EDF by October.
On Friday July 8th, EDF published a press release noting the announcement made by the French State and confirmed the search for a new CEO that will take the role in September. In the same time, some articles mentioned EUR7Bn to buyout the minorities and the FT mentioned SG and Goldman Sachs as advisers (each restricted on 04/05 for SG and 08/07 for GS wit a target price of EUR11.9 based on a 50/50 valuation P/E and DCF).
On Monday July 11th, Reuters article mentioned a EUR8bn amount to buy-out the minorities that could top up to EUR10Bn including the 09/24 CB (issue price @ EUR11.7, nominal value of EUR10.93 and can be redeemed by the company at any time starting 14/09/2022 under certain prices circumstances- Please see following link for more details : https://www.edf.fr/sites/groupe/files/contrib/groupe-edf/espaces-dedies/espace-medias/cp/2020/2020-09-08_cp-certifie_succes-emission-oceanes-vertes-paris-206533-v2a.pdf ).
Considering all these information’s and based on the General rules of the AMF (and precedent Simplified offer made in France, the last one being on Europcar), we could assume the following calendar that fits well with the French Government announcement that EDF will be fully nationalized by October:
Makor Estimated Calendar
13/07/2022
Announcement of the transaction
13/07/2022
AMF Notification
02/08/2022
Note en response from EDF (+15 BD)
18/08/2022
AMF Approval (+12BD)
23/08/2022
Publication of all documents to the public (+3 BD)
24/08/2022
Opening of the Offer (+3 BD)
22/09/2022
Closing of the offer (+22BD)
27/09/2022
Result of the offer (3BD)
30/09/2022
Settlement (+3BD)
BD: Business day per AMF General Rules
Regarding the price offered to minority shareholders, we’ll take a conservative view based on EUR8Bn for the equity (current number of shares outstanding is 3.868.480.343 of which 83.77% is held by the French State so floating is 626.693.815 net of treasury shares), this would translate into EUR12.75 eg 24% premium over the current share price. Question is if the shares related to the CB will be considered for the full dilution or if the company will use the EUR2.5Bn raised during the capital increase to redeem them.
EDF is currently trading at EUR10.3, a 17% discount to our EUR12 Target price. Once announced, we expect EDF shares to trade closed to the offer price
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