Electrabel
Update of March 2010
Following the squeeze out of Suez in 2007 on Electrabel, Deminor Active Governance Fund (DAGF) has launched proceedings, that are pending at the Court of Cassation following the decision of the Court of Appeal of Brussels on 1st December 2008. Deminor argues that minority shareholders have been deceived on the consideration offered during the public offering and the subsequent squeeze out, and claims additional payment from GDF Suez as shareholders are entitled to a "fair" price when they are forced to sell their shares. Their arguments have been comforted recently by the decision of the Belgian State to extend the lifetime of three nuclear power plants for 10 years. This extension of the nuclear power plants' lifetime represents substantial additional profits for Electrabel (and consequently for Suez).
Update of April 30, 2007
In accordance with article 57 of the Belgian R.D. of November 8, 1989, Deminor sent a letter to the CBFA on behalf of DAGF in relation to the Electrabel squeeze-out.
The purpose of the letter was to formulate a number of observations regarding the valuation methods used by the expert Lehman Brothers in its fairness opinion. Many of these observations have been formulated under the form of questions in the absence of precise information about certain hypotheses underlying the valuation.
Deminor is awaiting the reply of the CBFA before making a final position on the consideration offered by Suez to Electrabel's minority shareholders.
Update of March 7, 2007
On 5 March 2007, the Suez Group announced its intention to acquire the remaining shares it does not already own in Electrabel by launching a squeeze-out. The free float currently represents 1.38% of the share capital of Electrabel.
Deminor Active Governance Fund (DAGF) is a shareholder of Electrabel since its launch in 2006. DAGF considers this decision to be consistent with Suez's intention to simplify the Group's structure. However, the fund will monitor attentively this squeeze-out procedure in order to make sure that the interests of all Electrabel shareholders are being taken into account.
As fund manager, we will pay special attention to the compliance with all Corporate Governance principles applicable to such situation. Our focus will be particularly on the quality and completeness of the information and reports communicated to shareholders, including:
- The report drafted by the bidder with the justification of the price and the underlying valuation methods.
- The fairness opinion of the independent expert, including his assessment of the applied valuation methods and his opinion whether the price offered safeguards the interests of the Electrabel shareholders.
- The opinion of the Board of Electrabel with respect to the offer.
In addition, DAGF will make sure that the decision process is transparent and that the Board of Electrabel is in a position to deliver an independent opinion. DAGF also insists on the fact that the price offered to shareholders must be based on the actual « fair value » of Electrabel, as calculated according to standard valuation methods (DCF, etc.). In addition, this valuation will have to take into account the future prospects for Electrabel concerning the possible life extension of its nuclear power plants which could result from the current discussions between the European member states relating to the global warming.
If necessary, DAGF will communicate its opinion to the CBFA within 30 days, as provided by law.