French power utility EDF has made an indicative offer for nuclear group Areva's reactors business, a spokesman for Areva said. Les Echos newspaper, citing sources, said the bid was worth just over 2 billion euros ($2.2 billion). "We have duly received a letter with an indicative offer," an Areva spokesman said. He declined to comment on the price.
An EDF spokeswoman declined to comment. Les Echos, citing a source close to the situation, said the indicative offer should be followed by a period of due diligence before it can be made into a firm bid. EDF chief Jean-Bernard Levy said on Tuesday an offer for the business would be made in the coming days, but gave no indication of price. The potential deal involves two state-controlled companies. A person familiar with the matter told Reuters last week that pinning down a precise value for the business was proving difficult, with the figure in a range of 2-3 billion euros.
The reactor business is valued at 2.7 billion euros in Areva's accounts, a source familiar with the situation has told Reuters. While Areva's nuclear technology is considered one of the most advanced globally, the firm has not sold a reactor since 2007 and has made losses in the past four years.
Les Echos said EDF's offer had been value on the basis of a multiple of 7.5 times the core earnings before interest, tax, depreciation and amortisation (EBITDA) of the reactor business. A final decision on a possible takeover is still weeks away. French Economy Minister Emmanuel Macron told reporters on Friday that President Francois Hollande would review strategic priorities for the nuclear industry at a meeting in his Elysee palace on June 3. After meeting with Macron on Friday, Areva union officials told Reuters that no decision on the restructuring would come before a mid-July meeting of France's national nuclear policy council.