EDF shares surged on Tuesday after reports the French government is poised to pay more than €8 billion ($8.05bn) to bring the power giant back under full state control, aiming to complete the deal in the fourth quarter.
Reuters reported a source saying the cost of buying the 16 per cent stake the state does not own could be almost €10 billion, when accounting for outstanding convertible bonds and a premium to current market prices.
EDF and the French Ministry of Economy declined to comment.
Citing the report, JP Morgan said in a note the price range would translate in an offer of €10.2-€12.7 per share, or a premium of up to 32 per cent on Monday's close.
"(This is) in line with our view that the government may make an offer close to €12 per share," it said.
EDF shares were up 5 per cent early in the session at €10.14, making them the best performer on France's SBF-120 equity index which was down 0.8 per cent, having earlier risen as much as 9 per cent.
The government announced last week it would nationalise the company, which would give it more control over a revamp of the debt-laden group while dealing with a European energy crisis.
The Reuters sources said the state would probably launch a public offer on the market at a premium to the stock price because the other option — a nationalisation law to be pushed through parliament — would take too long.
When Prime Minister Elisabeth Borne announced the nationalisation plan on July 6, the stake held by minority shareholders was worth about €5bn.
The French government would also have to buy €2.4bn of convertible bonds and offer a premium to current stock market prices to entice minority shareholders, with the cost of the transaction going well beyond €8bn, the sources said.
They did not give details of the size of the premium, with one of them saying no final decision had been made.
France wants the buyout to take place in October or November, and for that to happen it would have to move quickly, the sources said.
They said the next step would be for the government to announce the offer price and make an official filing.
Then EDF would need to give its opinion while an independent expert would be drafted in to review the offer price.
All of this will take some time, given the holiday season lull.
France may have to announce the terms of the offer over the coming weeks, before the holiday period in August, to ensure it can have a deal in the fourth quarter, one source said.
"It won't be an operation that will be fulfilled in days and weeks, it will take months," French Economy Minister Bruno Le Maire said at the weekend.
"I will provide all the necessary precisions in the coming weeks but not now."
The government last week increased the amount of money available for financial operations related to its state shareholding portfolio by €12.7bn in the second half of the year.
Officials said this would cover the EDF deal and other, unspecified transactions.
Goldman Sachs and Société Générale are working with the government to secure a deal, sources said earlier, while EDF is being advised by Lazard and BNP Paribas.