PARIS (Reuters) - French state-controlled utility EDF (PA:EDF) is still months away from formulating a firm offer for a majority stake in Areva's (PA:AREVA) nuclear reactor unit, a source familiar with the situation said.
On June 3, the French government approved EDF's plan to take over Areva's nuclear reactor unit and gave the companies a month to work out a deal.
The source said the two companies were talking but it was highly unlikely a deal would be signed by early July.
"It will more likely be after summer," the source said.
Financial daily Les Echos said on Friday that, taking into account due diligence on Areva's accounts and consultations with unions, EDF was unlikely to present a firm offer before October.
EDF declined to comment. Areva could not immediately comment.
EDF has not said how much it would pay for the unit, but several sources say the power utility has put in a bid for 2 billion euros (1.4 billion pounds) for the reactor unit, which is valued at 2.7 billion euros in Areva's books.
Areva chairman Philippe Varin said two weeks ago EDF should improve its offer and Areva needed a cash injection of 6-7 billion euros as it would continue to burn cash until 2017 and face several major bond repayments.
He also said relations between the two companies would have to improve "radically" for them to reach a deal by the government's deadline of early July.
Areva's nuclear reactor unit represents about half of its revenue. Selling it means Areva would focus on its uranium mining and nuclear fuel business.