Nuclear powerhouse EDF poised for £12bn takeover of British Energy
An agreed takeover bid, likely to top 12 billion, could be announced in the next few days, ending months of speculation and creating one of Europe's largest energy companies.
BE, which operates eight nuclear power stations and one coal-fired plant in the UK, issued a statement saying it was in "advanced discussions" with one bidder – but refused to comment on the identity of the company involved.
A joint bid between EDF and British Gas-owner Centrica has long been the subject of City speculation.
Sources close to BE yesterday told The Scotsman that an initial deal was likely to be solely with EDF, although Centrica may become involved at a later stage – possibly taking a 25 per cent stake for about 3bn.
BE has been the subject of intense takeover talk since the UK government put its 35 per cent stake up for sale earlier this year. The government, which took on a 64 per cent stake when it rescued the company from near collapse in 2002 but sold more than a third of its shares last year, has previously said it does not want Britain's nuclear industry under the control of a single party.
However, it is understood that ministers do not have any major concerns over Britain's nuclear power being taken into French hands.
Elaine Coverley, an analyst at Brewin Dolphin, said: "When Centrica first got involved, they asked the government for preferential treatment as the only British bidder and they didn't get that, so the government is clearly not too bothered."
She added: "I think a deal with EDF is definitely the best thing for British Energy because they need to be involved in new nuclear in some shape or form and are not in a position to do that themselves."
BE's board is insisting that EDF pay 775p – valuing the company at more than 12bn – having rejected an offer of 680p made by EDF in May. ScottishPower owner Iberdrola, German energy firm RWE and France's Suez were also previously thought to be mulling a bid for BE, but dropped out of the race.
In a brief stock exchange statement, BE said: "The board of British Energy notes the recent speculation about the status of its talks with third parties. The board confirms that it is in advanced discussions with one party. However, there can be no certainty that the discussions will lead to an offer being made for British Energy."
EDF and Centrica refused to comment. It is not known if British Energy's headquarters would stay in Scotland following any takeover by EDF.
BE shares last night closed 6.2 per cent higher at 728.5p.