UPDATE: Edison CEO Asked To Step Down By EDF-Source

The chief executive of troubled Italian power utility Edison SpA's (EDN.MI) has been asked to step down by French power giant Electricite de France SA (EDF.FR), a source close to EDF said Monday.

Edison Chief Executive Umberto Quadrino "has been asked to step down due to his performance at the helm of the company which is in a bad shape," the person told Dow Jones Newswires, citing the four recent profit warnings Edison issued, three in 2010 and earlier this year.

When Quadrino's mandate expires, "he simply won't be renewed," the person explained, when asked about detail on Edison CEO's dismissal.

An Edison spokesman declined comment. CEO Quadrino declined to comment when asked via a spokesman.

EDF and smaller Italian utility A2A SpA (A2A.MI) have been contesting for control of Edison, Italy's second-largest utility. A2A recently announced that the two sides would extend an existing shareholders pact for six months. The negotiations have come against a backdrop of rising concern in Italy about acquisitions of Edison and other Italian companies by foreign companies.

Edison has been badly hit by natural gas contracts signed when natural gas prices were much higher than in today's glutted market. EDF, which has been particularly unhappy with the venture, said in its most recent earnings period took a EUR915 million impairment related to Edison and EDF's other Italian ventures.

According to Edison's legal status, it is EDF's prerogative to appoint or dismiss the top manager of the Italian utility.

The decision to dismiss Quadrino has been approved by EDF's other major shareholder, A2A Spa (A2A.MI), according to the source close to EDF.

A spokesman for A2A could not be reached Monday.

The decision will be made official during Edison's annual general meeting, the person close to EDF said.

Edison's AGM is slated to he held April 26 in Milan.

Shareholders must present candidates for the new board at least 20 days before the event, according to Italian rules.

At 1514 GMT, Edison shares lost 0.6% at EUR0.78, underpeforming the 0.1% gain on Italy's benchmark FTSE Mib index. A2A shares gained 0.6% at EUR1.13, while those of EDF lost 0.4% at 28.68.

- By Geraldine Amiel, Dow Jones Newswires; +33 1 40171740; geraldine.amiel@dowjones.com;

(Liam Moloney contributed to this story.)

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