French Set to Seal Deal for British Energy
UK's main nuclear power generator set to be bought by French energy group EDF
The UK's main nuclear power generator is set to be bought today by French energy group EDF in a £12.4bn deal that should kick-start government plans for a new generation of atomic plants.
British Energy, saved from bankruptcy by the state in 2002, is being acquired by EDF primarily because the French want to win control of attractive sites on which to construct more nuclear plants.
The takeover was set for completion in the summer but an 11th-hour revolt by key British Energy investors scuppered the public launch. EDF has sent out invitations for a press conference in Paris this morning and last night sources close to the industry said the loose ends had been tied up.
Neither EDF nor British Energy would comment but industry sources said that Invesco and M&G, which had rebelled against a 765p-per-share offer, now backed the deal. The offer has been raised to 774p but there is also an alternative of cash or a mixture of cash and contingent value rights (CVRs). These are used as a mechanism by which shareholders of an acquired company can receive additional benefits if a specified event occurs. In the case of British Energy, Invesco believes there will be more electricity price rises.
The takeover will allow the UK government to claw back a multibillion pound windfall from its 36% stake in the firm following the bail-out which was necessitated after a period of plummeting electricity prices. British Energy used to provide a quarter of the UK's electricity but breakdowns at its aging equipment had reduced that figure to less than 15%.
The deal with EDF is expected to see the French company agree to hand over to government a number of sites that it could then auction off to rival companies such as E.ON and RWE, known to be keen to build their own atomic plants.
BE runs eight UK nuclear sites with adjacent land on which reactors could be built. The eight are Dungeness B in Kent, Hartlepool, Heysham 1 and 2 in Lancashire, Hinkley Point B in Somerset, Hunterston B in Ayrshire, Sizewell B in Suffolk and Torness in East Lothian.
The group also owns a coal-fired power station at Eggborough, north Yorkshire.
British Energy, saved from bankruptcy by the state in 2002, is being acquired by EDF primarily because the French want to win control of attractive sites on which to construct more nuclear plants.
The takeover was set for completion in the summer but an 11th-hour revolt by key British Energy investors scuppered the public launch. EDF has sent out invitations for a press conference in Paris this morning and last night sources close to the industry said the loose ends had been tied up.
Neither EDF nor British Energy would comment but industry sources said that Invesco and M&G, which had rebelled against a 765p-per-share offer, now backed the deal. The offer has been raised to 774p but there is also an alternative of cash or a mixture of cash and contingent value rights (CVRs). These are used as a mechanism by which shareholders of an acquired company can receive additional benefits if a specified event occurs. In the case of British Energy, Invesco believes there will be more electricity price rises.
The takeover will allow the UK government to claw back a multibillion pound windfall from its 36% stake in the firm following the bail-out which was necessitated after a period of plummeting electricity prices. British Energy used to provide a quarter of the UK's electricity but breakdowns at its aging equipment had reduced that figure to less than 15%.
The deal with EDF is expected to see the French company agree to hand over to government a number of sites that it could then auction off to rival companies such as E.ON and RWE, known to be keen to build their own atomic plants.
BE runs eight UK nuclear sites with adjacent land on which reactors could be built. The eight are Dungeness B in Kent, Hartlepool, Heysham 1 and 2 in Lancashire, Hinkley Point B in Somerset, Hunterston B in Ayrshire, Sizewell B in Suffolk and Torness in East Lothian.
The group also owns a coal-fired power station at Eggborough, north Yorkshire.
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