Iberdrola to reveal intentions over £11bn British Energy bid battle

Published on Saturday 12 April 2008 15:07

UTILITY giant Iberdrola, which owns ScottishPower, is close to declaring whether it will join the £11bn bid battle for nuclear company British Energy.

Executives of the Spanish firm will face investors and the media at its annual meeting in Bilbao on Tuesday and they are believed to be showing a growing interest in the UK company. "Iberdrola would not have difficulty finding the finance," said one Spanish analyst.

Ignacio Galan, Iberdrola's chairman, is thought to favour a move on what is considered an opportunity to strengthen its position in the sector and in the UK. It would also help fend off the attentions of potential bidders, including Electricite de France, the state-owned utility which is rumoured to be planning a joint assault on Iberdrola with Spanish construction firm ACS.

Galan is expected to demand that EdF makes its position clear after several weeks of inaction and speculation. Iberdrola went to a Spanish commercial court in an attempt to force EdF to make a statement, but EdF contested the jurisdiction in what was seen as a delaying tactic.

But attention in recent weeks has switched to the battle for Livingston-based British Energy. Five European utilities are understood to be weighing up the possibility of buying the UK Government's 35.2% stake or launching a bid for the whole company. RWE of Germany has made a bid of 700p a share in cash while Centrica, owner of British and Scottish Gas, has proposed an all-share deal at a similar price. EdF, the biggest producer of nuclear energy in the world, is thought to be considering a sub-700p offer. Eon, another German company, is also weighing up its position.

Iberdrola is considered the outsider of the five, but it operates big nuclear plants in Spain and builds them in other parts of Europe. "The company has to be taken into consideration and it has to take into consideration the opportunity that now exists," said one analyst. "British Energy has the best sites for future development and it would be remiss of Iberdrola not to get involved."

Iberdrola is committed to major investment in the US. But if the right opportunity came along it could find the finance, said a source.