Nuclear takeover may be on again

Sep 6 2008 by Peter McCusker, The Journal

THE stalled takeover of nuclear power firm British Energy by France’s EDF could be back on within weeks.

The French power giant has held talks with some of British Energy’s biggest investors who scuppered a £12bn deal in July, it has been reported.

EDF is said to be hopeful of clinching a deal in the next two weeks before its board meeting on September 17. British Energy produces one-sixth of the UK’s electricity.

Discussion between EDF and Invesco Perpetual, British Energy’s second biggest shareholder with a 15% stake, are reportedly at an early stage although M&G, which has 7%, has not entered discussions, according to a national newspaper.

EDF has put forward a straight cash bid but reportedly offered to improve the potential payout under a cash and paper alternative which would give shareholders a bigger slice of potential profits as energy prices soar.

But oil’s fall from July’s peak has also persuaded some investors to be more flexible over price demands, the newspaper says.

EDF is majority-owned by the French government and a takeover would put the UK’s nuclear destiny in foreign hands. EDF would have a leading role in the next generation of UK nuclear power stations, which are likely to be built on British Energy’s existing sites.

The Government, which owns 36% of the company, had been prepared to accept the French firm’s original offer.

If an EDF takeover goes ahead, British Gas owner Centrica is expected to take a minority stake in the business.

Centrica is considering a number of other options including an all-share merger with British Energy if the EDF takeover deal falls through.