French fuel rise in energy shares
Apr 5 2008 by Peter McCusker, The Journal
BRITISH Energy shares jumped ahead yesterday after it was reported the board of French energy company EDF had given the green light for a takeover bid.
French newspaper La Tribune said EDF’s directors supported plans to make an offer for 100% of the company, which is part-owned by the Government.
Shares in British Energy, which is capable of meeting one-sixth of the UK’s energy needs and owns the nuclear plant in Hartlepool, were up 5% as a result, valuing the group at around £7bn.
EDF’s reported move follows the Government’s confirmation last month that it was considering selling its 36% stake in British Energy. The firm itself also said it had been in discussions with various parties about a takeover or merger.
State-owned EDF was named as a potential bidder, along with British Gas owner Centrica and Spanish industrial giant Iberdrola.
British Energy has eight nuclear stations and is expected to play a major role in the proposed development of the country’s nuclear power supply.
EDF operates 19 nuclear sites in France, where it supplies more than 80% of the country’s power needs.
The group also has extensive operations across Europe, with UK arm EDF Energy boasting 5.1m gas and electricity customers.
Any takeover could see EDF forced to sell some of its British assets to avoid the UK’s nuclear capacity being in the hands of a single overseas business..
No new nuclear power plants have been built in the UK since Sizewell B, in 1994. Decommissioning dates range between 2014 and 2035.
Last month, UK Business Secretary John Hutton said Britain must “significantly expand” its nuclear power production for the sake of national security and combating climate change.
The Government sold a 25% stake in British Energy last year, raising £2.08bn.
Chancellor Alistair Darling said the money would go towards the Nuclear Liabilities Fund, which will help meet the cost of decommissioning the group’s nuclear power stations.
The Government acquired its holding in British Energy after rescuing the nuclear power firm from collapse in 2004.
EDF declined to comment specifically on any proposed takeover of British Energy. But an EDF spokeswoman said the group was targeting the UK’s nuclear industry.
