UPDATE: BUY EDF: Government Buyout. Perf +25.45% to date

Reuters article out overnight saying the government set aside EUR 10bn to buyout the 16.3% minority interest and is having talks with unions – article cites people familiar

https://www.reuters.com/article/us-edf-restructuring-idUSKBN2BT2NM?taid=606cd2e3a0a3570001acd896&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter

Our back of the envelope calculation implies this is a >75% premium which would imply a price of EUR 19.8 versus the last price of EUR 11.225

Article does not mention any per share price so to be taken with caution as other costs could be factored in

Timing wise we expected the government first to focus on a deal with the EU for the split before turning to any buyout, this could however also imply a deal is close

We would expect to see significant strength in EDF today as our standalone valuation of the company in a split scenario was EUR 15 – this this article brings even further upside to our valuation. 75% from last night close.

EDF cheapest ESG play in Europe if ignoring the Nuclear assets – as an example EDF trades on a 2 year forward EV/EBITDA multiple of 5.2x while SGRE SM, VWS DC, ORSTED DC all trade around 22x