(BFM Stock Exchange) – The Prime Minister, François Bayrou spoke of adjustments in the stakes of the State which represent a heritage of not far from 200 billion euros. But beware of inappropriate potential.

It is an idea that regularly returns to the suggestions of political figures: to lighten the stakes held by the State in the capital of companies. And use the perceived windfall to invest or deleted. Last fall, several heavyweights from the presidential camp, notably the former interior minister, Gérald Darmanin, had advanced this possibility, remained a dead letter.

Prime Minister, François Bayrou, put it back on Tuesday July 15. During the presentation of its measures to reduce the public deficit and relaunch the activity, the Matignon tenant spoke that the State holds participations “in companies”. “In some, state participation could be reduced, without reducing its influence”. The head of government added that “the heritage thus released” could be implemented to “help major research programs”.

How much is the participations held directly by by the French State is currently being amount? This heritage is controlled by the State Participation Agency (APE). In its latest activity report, arrested on June 30, 2024, the agency indicated to hold shares in 82 companies, 10 of which are on the stock market, for an amount (the total value of these participations) of 179.5 billion euros (with 50 billion euros on the listed companies).

Since then, the value of listed participations has evolved. Based on certain hypotheses

detailed at the end of the article, News Bulletin 247 calculates that the participations of the APE in eleven listed companies (we added Eutelsat) are, in total, valued at around 68.6 billion euros, up 37% over one year.

The four highest participations are the 10.8% that the State holds in Airbus (15.7 billion), followed by 11.6% in the capital of Safran (14 billion euros) and the 26.6% in Thales (13.5 billion euros).

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“A total of almost 200 billion euros

As we have explained in a previous article, the increase in the value of this heritage is mainly explained by the leap of aeronautical and defense values, a sector that is on the rise on the market this year, carried by the numerous advertisements of military budgets in Europe.

The Thales action, for example, has won 78% since the start of the year. Orange (+37%) and Engie (+26.8%) also sign good performance. The first was carried out by better results and objectives than expected in France and by hopes for consolidating the telecoms sector in France and the second by several good publications.

Assuming that the valuation of the unlisted perimeter of the State is stable over a year, we arrive at participations of the APE worth a total of 198.1 billion euros.

What assignments?

What assignments could the state operate? Questioned by BFM Stock Exchange, a spokesperson for Bercy spoke of “an in progress reflection” on public participations without giving more precision.

The spokesman, however, stressed that transfers, if they should take place, would be used to finance the investment and not the reduction in public debt. Because the absorption of debt due to sales of participation does not enter the calculations of the reference statistical organizations (INSEE, Eurostat) and therefore in taking into account the debt known as “in the sense of Maastricht”, that which respects the European rules in the matter.

If for the moment no indication of the potential transfers has therefore been given, let us recall that it is easier to reduce the wing on the participations in listed companies, since in essence a market price exists.

The state has already sold actions of the Safran aeronautical equipment supplier (in 2015 and 2018 for example) or in the Energy Group (2017). The 2019 pact law also provided the legal framework for the State to privatize Aéroports de Paris, of which it currently holds 50.4% of the capital. But this operation, made impossible by the health crisis these recent years, represents an important risk on the political level.

In 2014, the portfolio of listed securities managed by the APE thus represented 85 billion euros against, therefore, around 68.6 billion euros today.

Currently, it is permissible to wonder if the state needs to have such an important participation in the capital of the FDJ United silver operator (the new name of FDJ) of 21.1%, even Engie (23.6%), to weigh in its decisions.

Be careful “to poor financial choices”

“There can be superfluous (in these state participations, editor’s note) but with rare exceptions it seems to me a bad idea” to alleviate state participations, decides Vincent Juvyns, director of investment strategy at ING Belgium.

“The elephant in the porcelain store, as in other European countries, remains the expenditure of the state,” he adds.

The market expert points out that state participations are done within strategic companies, such as Thales, Safran, Airbus or Orange. In addition, Vincent Juvyns calls for “not making bad financial choices”. “Many state participations reports a dividend with a rate of return higher than that of the state financing cost and therefore yielding capital can be inappropriate,” he warns.

In 2023, the shareholder state received for 2.34 billion euros in dividends. The ten listed companies represented the bulk of this sum, namely 1.6 billion euros.

Recall that the shareholder state is not intended to invest in companies as a traditional shareholder, which would focus on pure and hard performance. “The State is not a shareholder like any other,” said the Court of Auditors in a 2017 report. The challenges of sovereignties take precedence. “The Mission of the APE is to manage the portfolio of state participations, equity investor in companies deemed strategic, to stabilize their capital and support them in their development and their transformation,” said the agency on its site.

It should also be noted that the state, public and parapublic organizations have participations in listed groups. This is the case of Bpifrance, shareholder of Stellantis, Worldline or Eutelsat, or more recently of Veolia and the Caisse des Dépôts et Consignations, presents to the capital of Emeis (ex-Orpea), Euronext, Icade, or even the Compagnie des Alpes.