April 19, 2016 / 4:46 PM / 4 years ago

UPDATE 2-EDF staff investors demands France buys out minorities in nuclear dispute

* Staff shareholder group says state abuses majority

* Minorities say EDF used as government policy tool

* EAS fears Hinkley Point will crimp future dividends (Adds detail on dividend, EDF no comment)

By Geert De Clercq

PARIS, April 19 (Reuters) - An EDF employee shareholders group has asked the AMF market regulator to force the French state to buy out the utility’s minority shareholders, in a dispute over its plans to build nuclear plants in Britain.

In a letter to the AMF, seen by Reuters on Tuesday, EDF Actionnariat Salarie (EAS) asks the market regulator to consider requiring the state to launch a so-called public withdrawal bid.

EAS alleges that the government is abusing its position as a majority shareholder by forcing EDF to go ahead with building nuclear plants in Britain, which EAS says is too risky for EDF and will prevent it from paying dividends in coming years.

EDF staff are the utility’s second-largest shareholders, with a combined stake of 1.66 percent, ThomsonReuters data show. EAS is one of three staff shareholder associations but does not disclose how many shares it represents.

EAS said it wants the government to launch a bid at 32 euros per share, the price at which EDF was taken public in 2005. EDF closed 2.74 percent higher at 11.61 euros on Tuesday.

Withdrawal bids are commonly used to mop up unsold stock following a takeover, rather than by minority investors forcing a majority shareholder into making a bid against its will.

EDF declined to comment. The AMF and the economy ministry were not immediately available for comment.


EAS argues that in pushing EDF’s 18 billion pound (22.8 billion euros) project to build two reactors at Hinkley Point, in Britain, the government defends the interests of the country’s nuclear industry rather than those of EDF, at the expense of its minority shareholders.

French Economy Minister Emmanuel Macron said last month that dropping the Hinkley Point project would have grave consequences for investment and employment in the French nuclear industry.

Hinkley Point is crucial for the survival of reactor builder Areva and France’s many smaller nuclear companies, in an industry that employs about 200,000 people. With three quarters of its power generated by nuclear, France needs no more reactors, and export prospects are limited after the 2011 Fukushima disaster.

“While the state only owns 85 percent of EDF’s capital, it behaves as if it is the sole proprietor and uses the company as a lever for its industrial policy,” EAS said.

It also said the UK project will prevent EDF from paying a dividend for at least seven years.

“The Hinkley Point financing will block shareholders from getting dividends over the 2017-2025 investment phase,” it said.

EDF has offered to pay its dividend on 2015 earnings in shares, which the state will take, leaving 1.8 billion euros in EDF’s coffers. The firm cut its dividend to 1.10 euro from 1.25 but has said it plans to keep paying dividends.

On Wednesday, the government will discuss EDF’s finances ahead of an EDF board meeting on Friday. Sources close to the company said the board will review financing options but will not decide on Hinkley Point. (1 euro = 0.7906 pounds) (Editing by Alexander Smith)

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