Government in support of EDF takeover of British Energy

The energy minister expressed his inclination towards the take over of British Energy by EDF (Electricite de France) to the Financial Times. Mr. Malcolm Wick stated that according to the UK government, this will be the most sensible deal. His remark is a clear indication that the government is still hoping for the take over which has already faced failure once last month as EDF was not ready for a £12bn trade-off with the British Energy, to happen.

While on the other side, Centrica, British gas’ owner is still hoping for a merger with the British Energy to come out as a national champion, in case the take over does not happen. If things go into British Gas’ stride, they plan to involve EDF in a partnership for building new and plenty nuclear power stations.

Invesco (which has a stake of 15 per cent in British Energy and 5 per cent stake in Centrica) and M&G’s (having a stake of 7 % in British Energy and 2 % in Centrica) believe that EDF’s offer underestimated British Energy.

People who have been in close association with the negotiations say that the government, which has 35 percent stake of British Energy, would plan to sell its equity to the Electricite de France, only if the enterprise was able to convince more than 50 percent of the institutional shareholdings for the trade, which seems like a Herculean task for EDF.

Please visit www.edfenergy.com, www.british-energy.com and www.centrica.co.uk for more details