France's nationalisation of energy company EDF to cost nearly €10bn

The government is looking to shore up domestic energy supplies

The French government plans to fully nationalise energy giant EDF and is to shell out nearly €10bn (£8.5bn) as it looks to address the energy crisis.

On Tuesday, France's finance ministry said it had offered €9.7bn, or €12 a share, for 16% stake of the debt-laden company it does not already own.

Among its developments, EDF is building the Hinkley Point C nuclear reactor in Somerset, though it won't be completed for some time amid delays and cost increases.

The offer compared with the closing price of €7.84 on July 5, the day before the government mooted the nationalisation, this offer is 53% higher and also some way above an €8bn estimate last week.

EDF shares, suspended since July 13 while investors awaited government plans, jumped 15% to €11.80, giving the company a value of €45.4bn.

EDF's convertible debt holders will receive an offer of €15.64 for each bond, and the final offer for the company's stock is due to be submitted to Autorité des Marchés Financiers by early September.

Though nationalisation offers some certainty to EDF's finances at a crucial time, despite a broad oil crisis aggravated by Russia's invasion of Ukraine, the French government's plans to nationalise EDF is facing fierce opposition from employee shareholders who are to sue the government.

France derived 69% of its electricity from EDF's nuclear production in 2021, but this year's supply level is expected to be the lowest in over three decades.