EDF Would Renegotiate Edison Deal If Consob Forces Higher Price-CFO
November 18 2011 - 10:20AM
Dow Jones News
French state-controlled power company Electricite de France SA
(EDF.FR) would renegotiate its proposed deal to take control of
Italian utility Edison SpA (EDN.MI) if Italian stock market
regulator Consob forces a higher price than the EUR0.84 agreed
upon, EDF's Chief Financial Officer Thomas Piquemal said
Friday.
Piquemal said the company's lawyers are working on a formal
proposal to be sent to Consob within the next few days. He said EDF
and the other shareholders of Edison have agreed on the general
principle for a takeover deal and that lawyers are now working on
the details.
The deal includes a payment of EUR0.84 a share for Edison, the
share price's 12-month average, Piquemal said.
Consob will evaluate the deal and decide whether to force EDF to
launch a tender offer on the outstanding shares of Edison and would
have to approve the price. Piquemal said if Consob were to set a
price above EUR0.84, EDF would ask for a full renegotiation of the
deal because "this isn't the hypothesis over which we negotiated
the agreement."
The EUR0.84 price values the company at about ten times its
Ebidta, he said. "This is much higher than the current ratios of
Edison's competitors, which are close to 5 or 5.5 times," he told
reporters on the sidelines of a conference held in Paris.
EDF currently holds about 50% of Edison directly and indirectly.
The French company has been pushing for direct control following a
series of costly natural gas contracts that have marred Edison's
financial performance. Edison is 61.3%-held by Italian company
Transalpina di Energia, itself 50%-held by EDF and 50% owned by
investment vehicle Delmi, which in turn is led by Italian utility
A2A SpA (A2A.MI).
After the takeover of Edison, EDF plans to use the Italian
utility as a "pillar" for its natural gas strategy in Europe and
accepted to abandon some assets, mainly hydro power plants,
Piquemal said.
-By Inti Landauro, Dow Jones Newswires; +33 6 4608 4324;
inti.landauro@dowjones.com
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