UPDATE: EDF Makes Offers To Gain Total Control Of Edison

French state-controlled power giant Electricite de France SA (EDF.FR) Monday offered to buy its Italian partners out of Italian power company Edison SpA (EDN.MI), in a move aimed at gaining full control of the utility after nearly two years of haggling over its strategy and management.

EDF, which is 85%-owned by the French state, said it offered to buy out investment vehicle Delmi from Edison, although it came short of elaborating on an exact price per share.

Last week, a person familiar with the matter told Dow Jones Newswires that EDF turned down a request from Delmi to be bought out of Edison for EUR1.55 a share. Sunday, Italian business daily Il Sole 24 Ore reported that EDF was ready to offer EUR1.15 and EUR1.30 a share.

Edison is 61.3% held by Transalpina di Energia, itself 50% held by EDF and 50% by Delmi, which in turn regroups Italian shareholders led by A2A SpA (A2A.MI) and including Iren SpA (IRE.MI). EDF owns 19% in Delmi.

No-one at Delmi, A2A nor Iren was immediately available to comment.

EDF proposed to buy Delmi's Edison shares in three years time, at a price based on the earnings before interest, tax, depreciation and amortization, or Ebitda, multiple of a sample of comparable listed companies.

"In this manner, the Italian partners which may wish to be able to sell their shares could benefit from Edison's profitability restructuring efforts," the group said.

Also Monday, EDF offered A2A and Iren SpA (IRE.MI) to exchange their respective 20% and 10% stakes in Edipower for 100% of the share capital of Edens, a fully-owned subsidiary of Edison and the fourth-largest Italian producer of electricity from renewable sources. A2A and Iren would also be granted a call option to acquire a hydro-generation facility at Mese at fair market value in three years, EDF said.

"On the basis of this framework, EDF would ask [Italian regulatory body] CONSOB for an exemption from any obligation to launch a mandatory tender offer for Edison's remaining share capital," the group also said.

EDF and Edison's Italian shareholders have been entangled in long talks over the utility's fate, trying to reach a deal that would give clear control of the Italian utility. The most recent deadline for an agreement is Oct. 31.

Earlier this year EDF reached a preliminary agreement with A2A that would have allowed the French utility to take control of Edison and let A2A acquire some hydroelectric assets. However, the agreement was botched by the Italian government, forcing them to renew talks to find another solution.

At 1150 GMT, shares in EDF were trading up 0.6% at EUR22.67, while the CAC-40 benchmark index was down 0.1%. Shares in Edison, after having been briefly suspended during the session, resumed trading and were down 5.4% to EUR0.89.

-By Geraldine Amiel, Dow Jones Newswires; [phone]; [e-mail]

(Oscar Bodini from MF-DJ in Milan contributed to this story)