Santander | EDF has announced that the takeover bid for its shares by the French state has raised the state’s stake in the company to 97.69% of the share capital and that the state will now seek to acquire the minority stakes through a squeeze-out process, which it expects to result in full state ownership by 8 June. In addition, EDF issued a press release yesterday to announce that the state has requested the conversion of the OCEANE convertible bonds into 1.4 billion new shares.
Assessment: While the French state’s increased stake in EDF provides little in terms of direct support, full state ownership will facilitate the implementation of national energy policy. For Luc Rémont, the new CEO, the revival of nuclear production will most likely be his top priority, and he can be expected to announce an updated strategic plan in the near future, focusing on how EDF will participate in the government’s goal of starting construction of six new nuclear reactors in the near term. On OCEANE, S&P has indicated that it will treat the conversion as equity, which will likely give EDF the flexibility to redeem without replacing the two hybrids with a call date in 2024.