Centrica eyeing British Energy

Gas and electricity giant Centrica is said to be eyeing nuclear power company British Energy. British Energy has been in talks with several corporate for potential merger. Prominent contenders include Spain’s Iberdrola, Germany’s RWE and France’s EDF.

Last week EDF came close to sealing the deal when it made a cash offer of 765 pence per share. However, bid fell short of hopes of two major stakeholders, M&G and Invesco. It is worth pointing that both M&G and Invesco holds shares in Centrica as well. British government holds 35% stake in British Energy. Business and Enterprise Secretary John Hutton expressed his disappointment over the failure of the EDF bid however he claimed that it would not derail the process. Government had earlier rejected a share-swap plan proposed by Centrica.

After a round of allegations on Friday, it is still unclear whether EDF will be back with the higher offer or not. Industry experts have valued the fair price to be over 8GBP per share for British Energy. However, both EDF and British Energy, are expected to have substitute plans. British Energy is said to be keen on joint ventures for developing individual sites. Whereas EDF would be acquiring prospective sites.

Proposed merger could have catapulted EDF to the position of largest power generator in UK. Centrica would have been the minority partner in the now-terminated EDF acquisition plan. However, both Centrica and EDF are keeping their options open. EDF is still pondering over the option of revising its bid whereas Centrica is said to be open for being acquired by British Energy.

Please visit www.centrica.com and www.british-energy.com for more