Electricite de France SA said a deal to take control of Edison SpA may collapse if regulators refuse to exempt the purchaser from a mandatory offer for outstanding shares and it’s forced to pay above the current market price.
EDF, Europe’s biggest power producer, will file a request for an exemption in coming days, Chief Financial Officer Thomas Piquemal told investors today at a conference in Paris.
The utility, based in the French capital, holds 50 percent of Edison through direct and indirect stakes and has sought for more than a year to take control of the company to get access to gas assets and markets in the Mediterranean basin and southeast Europe. As a result of its efforts, EDF has negotiated a new shareholder accord for Edison, Italy’s second-biggest utility.
The agreement, which would give EDF control of the utility, was reached weeks ago and details that are being written up by lawyers may be completed “very soon,” Piquemal said. EDF wants to pay a figure around the current share price for Edison, which is trading at about the average for the past year, he said.
“If we have to make an offer and the price is higher than the average of 12 months, then we would have to renegotiate the whole agreement,” Piquemal said. A higher price wouldn’t “fit with the hypothesis” on which the agreement is based, he said.
The current price is at a multiple for earnings before interest, taxes, depreciation and amortization “of 10 times for 2011, which is very high versus comparable listed companies,” the CFO said. Taking the Italian utility’s debt into account would give a price that was “signicantly lower,” he said.