Gaz de France to square up against rivals as British Energy bid deadline looms

Published on Saturday 3 May 2008 14:56

GAZ de France and a number of American energy giants are thought to be considering a move on British Energy ahead of this week's deadline for bids.

Sources say Gaz de France has plenty of cash even after buying a power station on Teesside, a move that indicated its desire to grow in the UK.

Gaz de France and international industrial and services group Suez, through its subsidiary Electrabel, each acquired a 50% stake in Teesside Power Limited from Cargill and Goldman Sachs, giving them control of Europe's largest combined-cycle gas turbine plant.

The Gaz de France Group is the leading natural gas distributor in Europe, employs nearly 50,000 people, and earned ?27bn (21.1bn) in sales in 2007.

The range of bidders for British Energy is likely to be headed by lectricit de France (EDF), the state-controlled utility, with German firm RWE reportedly cooling on its interest.

Centrica, which trades as British and Scottish Gas, is likely to pitch in, as will Eon, the German firm. Iberdrola, the Spanish owner of ScottishPower, is thought to be more interested in picking up contracts or unwanted assets from the eventual buyer, which is expected to be a consortium of at least three firms, thereby meeting the Government's preference. The Treasury owns a 35.2% stake.

Separately, Iberdrola complained to the European Commission against EDF over allegations that it has a monopoly over France's nuclear plants.

An Iberdrola spokesman confirmed that the utility is accusing France of violating Article 86 of the EC Treaty by approving measures that give EDF a "substantial competitive advantage" and reinforce its dominant position.

Iberdrola accuses EDF of violating Article 82 of the EC Treaty through the use of monopoly practises and asks the commission to take action against the French energy giant's alleged abuse.

This is Iberdrola's fifth charge against France and EDF in Europe, in addition to a complaint filed with the Bilbao mercantile court requesting that EDF declares its intentions regarding the Spanish utility.

The moves follow months of media speculation that EDF is in talks with Spanish constructor Actividades de Construccion y Servicios SA over a possible joint bid for Iberdrola.