The UK’s biggest electricity producer, British Energy, has received early stage takeover proposals, it said on May 16, which value it at more than 10.8 billion pounds.
According to Reuters, the nuclear power company, which operates eight nuclear plants, has received takeover or other approaches from French utility EDF, France’s Suez, and a consortium made up of Germany’s RWE and Spain’s Iberdrola, a source familiar with the matter told Reuters.
The stock was up 6.7 percent at 725.5 pence per share by 12:08 p.m., valuing the company at over 11.5 billion pounds, including the government’s 35 percent stake.
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British EnergyÕs eight aging power plants, built since 1965, have been beset by corrosion and other technical problems in the last two years.
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British Energy said it had received proposals from several parties wishing to make a full offer for the company including the Nuclear Liabilities Fund, which represents the government’s 35 percent stake. It did not identify the potential bidders.
British Energy, based in East Kilbride, Scotland, said the approaches are at an early stage and each requires several weeks of further development.
Suez said it had not submitted a bid for shares in British Energy. EDF, RWE and Iberdrola declined to comment.
“Suez has been in contact with British Energy but is more interested in building a relationship that would allow them to build power plants in the UK rather than bidding for British Energy,“ said a second source familiar with the matter.
Suez has not ruled out making a full takeover bid in the longer term, the source said.
British Energy declined to comment.
British Energy’s eight aging power plants, built since 1965, have been beset by corrosion and other technical problems in the last two years.
But the company is expected to be a key beneficiary of UK government plans to build more nuclear power plants to resolve a predicted electricity supply shortfall.
Despite concerns about storing nuclear waste and the cost of building the plants, the government is keen on power plants which do not emit large amounts of carbon dioxide.
That has sparked interest from Europe’s biggest utility firms.
One of the sources familiar with the matter said British Energy has received two proposals since EDF made its offer last week, with one from Germany’s RWE which has paired up with Spain’s Iberdrola and one from France’s Suez.
Iberdrola, which owns Scottish Power in the UK, does not want to lead its own bid and RWE had not made an offer by last week’s second-round deadline as its original partner Vattenfall had pulled out of the process.
Suez said in April it would not decide on major investments until its ongoing merger with rival Gaz de France is complete.
“We have made our position clear and our position has not changed since then,“ said a company source.
British Energy’s shares had declined 13 percent before Friday from a 785p all-time high on April 25 because EDF--which submitted its bid last week according to a Reuters source--was feared to be the only potential bidder.
“It is clear that the press speculation that only EDF had made a bid, with some reports putting the bid as low as 650p, was misleading and contributed to price weakness in recent days,“ said analyst Lakis Athanasiou at broker Evolution Securities.
“The board has reviewed the proposals and has decided that discussions should continue with all the parties concerned,“ said British Energy.
Both RWE and Germany’s E.ON declined this week to comment on a possible takeover while reiterating that they are both interested in building new nuclear power plants in the UK.
Centrica, the only British firm previously thought to still be in the race, was not one of the parties which has made a bid, according to the Reuters source.
The company, the UK’s largest gas supplier, would have difficulty funding a takeover on its own and would likely need to join a consortium, Evolution analyst Athanasiou said.
However, an industry source said that Centrica was still in talks with EDF about possible cooperation in any deal. Centrica declined to comment.