EDF still chasing British Energy
Posted on: September 6th, 2008 by Lynnette Adamson
According to industry sources, French energy giant EDF is still in talks to acquire British Energy. However, a key shareholder said that British Energy is also exploring a proposal from Centrica.
British Energy shareholders had earlier rejected an all-cash offer of 12 billion pounds made by EDF at the beginning of last month.
However, M&G, who is a 7 percent shareholder of British Energy, told Reuters that it still considers the EDF offer to be undervalued. It is holding talks with Centrica, the British Gas-owner, on a rival deal.
Centrica had earlier offered an all-share deal to British Energy which it had rejected.
M&G is one of the two major shareholders who are favouring merger with Centrica, the other being Invesco, which holds 15% shares of British Energy. Both investors have rejected 765p per share offer of EDF, calling it undervalued.
The British Government, with a 35% stake in British Energy, is in favour of EDF’s all-cash offer. The current talks are not about raising the bid. The falling oil prices have made the 765p per share offer attractive. From nearly $150 per barrel in July, the oil price has now come down close to $100.
Neither side has put any deadline to end the talks. Centrica as well as EDF have declined to make any public statements.
Ever since, the British government gave a green signal to construct new nuclear power plants, BE has become an attractive target for acquisition. This is because the new plants are likely to be constructed on BE’s land.
Please visit www.edfenergy.com, www.centrica.co.uk and www.british-energy.com for more
