EDF closer to acquiring British Energy

EDF has come up with a new offer of more than £12 billion which could seal the deal for its acquisition of British Energy during this week.

The French Energy giant would table its revised offer today. It is being anticipated that British Energy could accept the offer and the merger issue might get resolved this week. EDF’s earlier bid in July was rejected by some of the key shareholders of British Energy as being ‘undervalued’. The fresh offer is likely to include a 775p per share cash offer and a stake in company’s future profits. If British Energy’s board accepts the offer, EDF’s could go ahead at its scheduled board meeting on September 17 in Paris and the merger could happen with the next few days.

EDF has insisted that it does not want any last-minute problems. The previous time, when it had offered 765p cash per share or 700p and shares of future profits, the offer was rejected at the last minute by two rebel shareholders. M&G and Invesco Perpetual had unexpectedly voted against the merger move by saying that the offer has undervalued UK’s largest wholesale energy producer.

The wholesale energy costs were high in July. But subsequent fall in input costs have blunted their argument. It is believed that Invesco Perpetual, which holds 15% stake in British Energy, may have given its tentative support to the revised offer. UK government, holding 35% stake, is already in favour of EDF. The only question that remains is about M&G’s acceptance, which holds 7% stake.

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