EDF to acquire 100% of renewables arm

FRANCE: French utility EDF plans to buy the 50% stake in its renewable energy subsidiary, EDF Energies Nouvelles (EDF EN), that it does not already own.

EDF is offering EUR40 per share, representing a premium of 10.4%. Alternatively, shareholders can swap 13 EDF shares for 11 EDF EN shares.

EDF said this would allow it "to benefit fully from the future value-creation of renewable energies," the group says.

Parîs Mouratoglou, EDF EN chairman, with a 25% holding, has accepted the offer. The Board also backed the move. Among other things, it would allow EDF EN to "profit from stronger cooperation with EDF and strengthen the company’s rapid and profitable growth strategy across its renewable subsidiaries," the Board says. A key element is better access to capital to fund its growth.

It is uncertain how the remaining minority shareholders will react. But some have argued the offer is too low given EDF EN's growth prospects. The company is predicting an increase of at least 23% in its earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2011.

EDF EN also stands to benefit from growing concerns over the safety - and cost - of nuclear power, while EDF's shares fell 13% in the month following the Japanese earthquake.

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