Bloomberg News

Edison Shareholders Said to Seek Italian Chairman From EDF

July 19, 2011

(Updates with closing share price.)

July 19 (Bloomberg) -- Edison SpA’s shareholders may seek an Italian chairman with veto power as part of an agreement to cede control of the company to Electricite de France SA, said two people with knowledge of the talks.

The concession could help assuage government concerns that a deal will put Italy’s second-biggest power company into foreign hands, said the people who asked not to be identified because the negotiations are private. The agreement would involve a swap of some Edison assets, with the Italians seeking a higher valuation of the natural gas businesses they would receive. Italian shareholders also want EDF to pay a premium for any of the 30 percent of Edison they may eventually sell.

A preliminary agreement reached in March between EDF and Italian shareholders that gave EDF control in exchange for assets and cash was held up by the Italian government. On July 7 Brescia-based utility A2A, the largest Italian shareholder, said it would recommence negotiations seeking better terms.

A2A didn’t respond to e-mails or phone calls seeking comment. Edison declined to comment today. A2A said in a statement yesterday that no decisions had been made about what to offer EDF. A spokeswoman for EDF also declined to comment.

“A figurehead chairman with little control and the Italians at 30 percent seems like a scenario that the French might accept, I doubt the French would give away any real power though,” said Massimo Intropido, head of Milan-based financial research firm Ricerca Finanza. “In the end everybody wants this deal to go through, the French want to get on with business and the Italians need the money.”

Selling Assets

A2A is cutting costs and selling assets to reduce debt which was 3.9 billion ($5.5 billion) euros in 2010. The company posted 542 million euros in writedowns and depreciations in March partly related to its stake in Edison.

Edison shares have fallen 9.6 percent from a year ago. They gained 1.6 percent to close at 84.05 euro cents today in Milan. A2A and EDF have both fallen about 15 percent in the same period.

Edison’s biggest shareholder is Transalpina di Energia, a company half-owned by Paris-based EDF and half by Delmi SpA, which in turn is owned by A2A and other Italian companies. Transalpina has a 61.2 percent stake in Edison. Taking into account direct and indirect stakes, EDF controls about 50 percent of the Italian utility.

Edison’s shareholders have until Sept. 15 to reach an agreement, after which EDF and Delmi have to proceed with an auction of Edison shares. If a new preliminary agreement is reached the Sept. 15 deadline may be put off further to allow a final deal to be hammered out, the people said.

--Editors: Will Kennedy, Andrew Davis

To contact the reporter on this story: Alessandra Migliaccio in Rome at

To contact the editor responsible for this story: Will Kennedy at

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