EDF currently holds 50 per cent of the power producer and plans to purchase a further 31 per cent from A2A SpA and its partners.
According to analysts A2A SpA is set to lose money if a deal is completed, although it could gain a 1,000 megawatt Edison power station as part of the transaction.
A Milan based analyst said: “Edison is up on the report but it would be a bad deal for A2A. I calculate such a deal would value Edison shares at around €1.15 per share while A2A has Edison shares on its book at around €1.55.”
A2A SpA is understood to be disappointed with Edison’s performance and has expressed a desire for a reorganisation of the company. But it yesterday, “no transaction is currently under review”.
EDF has been on the acquisitions trail of late. It recently bought half a nuclear power business from US based, Constellation Energy Group, for $4.5bn (£2.92bn).
“If EDF were to buy a further 31 per cent stake that would almost certainly trigger a bid on Edison which would weigh heavily on EDF’s debt pile,” an analyst said.
EDF has recently come under criticism from Ofgem in the UK after the scale of the big six energy providers profits was revealed. Ed Miliband, energy and climate change secretary, is prepared to give Ofgem more powers to ensure household energy prices are cut this year.
EDF has a shareholder pact with A2A in Edison until September 2011 and both sides must give six months notice of any intention to withdraw