Shares of French state-owned power provider Electricite de France went on sale Monday as the government seeks to raise about $7.4 billion to fund the nation's university system.
Finance Minister Christine Lagarde said in a statement the government is offering money managers 45 million shares, or 2.5 percent of EDF, worth about 5 billion euros following an announcement by President Nicolas Sarkozy last week.
If there is sufficient demand, the government could sell as many as 67.3 million shares, she said, raising as much as 5.6 billion euros ($8.27 billion) based on Friday's closing price of 83.10 euros ($122.66).
The funds, earmarked for the public university system, could help soothe students who have been protesting a law passed this summer allowing universities more autonomy to raise private funding. The students fear the change will lead to the "commercialization" of free public education.
At the same time, Sarkozy is under European Union pressure to keep spending under control. He has already pushed back a commitment made by his predecessor Jacques Chirac on deficit reduction and economists fear the budget gap, flirting with the EU limit of 3 percent, may not fall as much as forecast this year as economic growth falls short of government expectations.
Sarkozy's 9 billion euros of tax cuts raised the ire of EU finance ministers with whom France shares a currency. EU deficit guidelines were created to prevent profligate governments running up debt and undermining the euro.
To raise money, the government already sold a 5 percent stake of France Telecom SA in June, raising 2.65 billion euros ($3.91 billion).
Monday's sale "is reserved for institutional investors because we privileged efficiency and speed," Lagarde said in an interview with France 2 television.
Current and former EDF employees, not included in the current sale, may have an opportunity to invest in a further share sale, a statement from the finance ministry said.
Before Monday's sale, the government owned 87.32 percent of EDF, and is required by law to keep 70 percent. At the end of Monday's sale, the government will hold at least 83.6 percent.
Hinting at future sales, Lagarde said: "We haven't said our last word. There is some room to maneuver."
On Friday, following Sarkozy's announcement of a 3 percent stake sale the night before, EDF shares fell 3 percent to 83.10 euros ($122.66), valuing the company at 151.42 billion euros.
EDF is one of Europe's largest power generators serving 37.8 million customers worldwide. With 58 nuclear power plants located on 19 different sites, nuclear activities account for 71.2 percent of the French company's generation.
In a world of rising carbon constraints and energy prices, mainly-nuclear EDF is an "absolute no-brainer buy," UBS analyst Per Lekander said.
In midday trading Monday, EDF shares fell 0.8 percent to 82.40 euros ($121.63) in Paris.