Posts Tagged ‘EDF’

Centrica eyeing British Energy

Monday, August 4th, 2008

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.

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EDF power station under fire

Saturday, August 2nd, 2008

It has been reported that on August 01 at 9:35am, a fire broke at Suffolk’s sub station due to an explosion in an 11kv main switch control room. After hearing a loud blast, residents of the area called the emergency. The blast disrupted power supply to thousands of EDF customers.

Fire fighters from all the near by places like Harleston and Beccles immediately reached the site. These men on duty are still standing at Rose Lane, Bungay EDF power station. They are waiting for a green signal from EDF, stating that all the seven live power equipments have been detached. Only after this confirmation, the fire crew will start their operation to bring the fire under control. Until then, they have requested the residents of the area, to stay inside houses, and to keep the doors and windows closed in order to avoid excessive smoke.

Immediately after the blast, EDF could restore power for many of its customers. However, 1042 customers are still without electricity. At 4:20 pm on August 01, a representative from EDF reassured all the affected families that they are doing their best to restore electricity as soon as possible, keeping everybody’s safety in mind. He apologized for this inconvenience.

He also informed that on their behalf, the British Red Cross team is helping the people who are without power. The Red Cross has set a camp in the parking area of the Library Car Park and is operational from a van. They are equipped with all the latest information. In addition, they are helping influenced families, by providing them hot drinks.

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Discussion over between BE and EDF on nuclear power generation

Friday, August 1st, 2008

British Energy (”BE”), the UK’s biggest firm in nuclear energy refused the takeover deal by a French state controlled organization, Electricite de France (”EDF”). It was a ₤12 billion deal. It is speculated that the BE stakeholders might have rejected the offer. They showed their disagreement to sell shares on yesterday’s price - 765 pence per share.

It is true that the UK government wants to minimize its reliance on imported oil and wants to enhance the nuclear power generated energy in the country. That is why the government agreed to give entry to a French firm, which is a 77% nuclear power generator in its native country France.

Evolution Securities Ltd. analyst Lakis Athanasiou commented over the phone that it all depends on the main shareholders of BE, which are the UK government, Deutsche Bank AG, Invesco Ltd., Prudential Plc along with Franklin Resources Inc. and M&G.

Both the sides have said that the doors are still open for discussions. John Hutton,

Business Secretary of the UK government confirmed that the deal was quite practical but few shareholders expected better price. The government is still on a look out for nuclear partners. On the other hand Pierre Gadonneix, CEO of EDF announced that this has not changed their target to play a major role in the UK’s nuclear market and internationally.

Another reality to the fact is that Malcolm Wicks, the UK energy minister said in an interview on April 17, 2008 that they are not in favor of one company or business taking control over all new upcoming nuclear power stations in the country.

EDF May Be Willing to Part with Atomic Sites for British Energy

Thursday, July 31st, 2008

EDF, global market leader in atomic power plants, may be willing to put up its U.K. nuclear zones to boost its chances of acquiring British Energy. This information was released to the media by two unnamed sources who were privy to the deals The U.K. government will make sure that fair market conditions are maintained for manufacturers of reactors. EDF spokesperson refused to comment on the deal in the making as it was confidential. EDF, it is believed, is on the verge of acquiring British Energy alongwith the UK share of 35.7% in the company at a cost of 12 and a half billion pounds. This deal, if it comes through would give EDF the advantage of also acquiring 8 atomic plants in Britain apart from sites for potential nuclear plants to come up. This however does not mean that EDF will have complete control over the plants, according to spokespersons representing Societe Generale, Paris. This means that EDF does not have that valuable a deal, even if its purchase strategy is fulfilled.

Malcolm Wicks, Energy Minister has expressed the U.K.government’s reservations and caution with giving free rein over to a single corporate house over future nuclear power plants. Meanwhile EDF is working on a contingency plan in case its hopes of acquiring British Gas do not get fulfilled. EDF has already purchased property close to Wylfa’s power plant that is controlled by the U.K. government’s Noclear Decommissioning Authority. This land will be used by EDF to set up around 5 nuclear reactor plants across the U.K.

EDF’s Possible Acquisition of British Energy Concerns MPs

Tuesday, July 29th, 2008

EDF may eventually control UK electricity market if allowed to acquire British Energy. This was cautioned by MPs, stating that healthy competition is essential for a stable and fair market. The Commons Business Select Committee released a document that could severely damage EDF’s chances of winning its bid of £12.4bn for taking over British Energy. The same document raised concerns about the possible dilution and weakening of UK’s varied electricity supplier choices if EDF has its way. Ofgem has now been appealed to, to bring in controls that will regulate the market and curb attempts to exclusively rule the market. Industry sources indicate that EDF, a French electricity supplier company may place its bid for British Gas within a few days. EDF, it is believed is also making attempts to take a smaller stake with Centrica, the founder organisation of British Gas.

The eagerness to acquire British Energy on the part of EDF is well-known. British Energy controls eight nuclear power stations and a single coal-fired plant; the locations of which are being seriously considered for housing future nuclear power stations. What has raised the hackles of MPs and industry watchers is that EDF already has a 7% slice of the pie in terms of UK’s electricity supply market. British Energy, if taken over by EDF will give the latter an additional slice of 35% in the market. Other electricity suppliers have also voiced similar concerns about EDF’s possible dominance of the market.

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Shareholders to benefit from British Energy sale

Sunday, July 27th, 2008

Shareholders of British nuclear power group, British Energy, will be offered shares of British Energy’s future profits.  The move is a clear indication that the company is trying to avoid any roadblocks over its takeover by the French company Electricité de France (EDF).

The company’s advisers came up with this scheme in order to overcome a stalemate over the company’s price.  Few weeks ago, EDF had had offered roughly 680 pence per share for BE.  It works out to a value of 9.5 billion pounds for the energy group.

However shareholders wanted a higher price.  Some of them told privately that they want a minimum of 800 pence per share.  They argued that, the rising electricity costs make British Energy worth more than what EDF is offering.  Shares of British Energy closed at 726.5 pence on Friday.

Advisers are now revising their offer price along with the lure of future payouts to the government as well as private shareholders.  The British government holds a third of British Energy’s stake.

According to sources, the payouts are linked to future electricity price and power output of BE.  It will benefit the government and the current private shareholders if BE does well in the future.  They are hoping that the new proposal will remove any barriers to get the deal through.

The British government is keen for the EDF deal to go through as it will enable it to carry forward its plans for new nuclear power stations for UK.

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Warning Bells Ring to Fix Energy Suppliers

Saturday, July 26th, 2008

In a huge blow to its customers, EDF has increased its gas and electricity rates by twenty two percent and seventeen percent in that order. This should serve as an immediate push to customers who’ve failed to fix their energy providers before facing the same predicament as EDF customers. A spokesperson from asserted that not only was EDF the most expensive of energy providers; this hike was going to be a blow to its base of 7.9 million subscribers. The situation is quite grim at present, given MoneyExpert research data that shows nearly 1.4 million people missed paying their energy bills this year. Things are not likely to improve, given the spiraling costs of fuel and the fact that companies make customers bear the brunt.

MoneyExpert spokespersons foresee that the EDF price rise will affect not only its own customers but also those of other energy suppliers which may follow EDF’s example by increasing prices. The need of the hour, according to Moneyexpert is for customers of both EDF and other energy providers to fix their fuel costs by looking for more cost-effective options and fixing them for the long term.

A startling revelation has come in from that EDF customers will be shelling out £190 over and above their current energy bills. The unit head of personal finance at predicts that other energy providers may soon follow the lead of EDF and announce price hikes. He goes so far as to say that getting electricity at cheap rates is becoming a thing of the past.

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EDF to acquire BE for 12.4 Billion

Friday, July 25th, 2008

Nuclear operator British Energy has consented to a takeover by French firm EDF for approximately 12.4 billion pounds, the equivalent of $24.61 billion, according to a source close to the deal.

News reports say that EDF has agreed to the terms of the agreement of approximately 775 pence a share with British Energy. The deal follows months of deliberations and is scheduled to close on Tuesday or Wednesday, next week.

Shares of British Energy were down slightly by 0.4 percent to 725.5 pence in early trading on Friday, July 5. The 775 pence a share-deal puts a price tag of 12.4 billion bounds on the firm; this includes a 35 percent stake of BE owned by the British government. Shares of EDF gained about 2.5 percent on Friday.

According to published reports, BE had confirmed on Thursday that it was holding advanced talks with “one party.” However, the firm also said that there was no guarantee of a deal.

The value of BE was difficult to ascertain because of the recent rise in energy prices, which led the firm to hold out for a higher bidding price. Nonetheless, analysts say that a recent decline in power prices may have caused BE’s shareholders to spin off the company.

Additionally, EDF is also looking to secure a deal with British gas firm, Centrica allowing the  U.K. company to buy a minority stake in BE. Industry sources say that talks between the two sides are ongoing. Sources also say that winning over Centrica is essential to influence the British government, which may not want a foreign firm to acquire the nuclear giant in totality.

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British Energy and EDF deal in a precarious position

Tuesday, July 22nd, 2008

Nuclear generator, British Energy clarified recently that talks were going on regarding its future in the light of a possible bid with EDF continuing through the summer. EDF has started work at land bought close to British Energy’s Hinkley Point Site to gauge how suitable it is for constructing a new reactor.

Meanwhile, Sir Adrian Montague, Chairman of British Energy announced at the annual meeting in Edinburgh that the company is not satisfied by any of the bid proposals put across earlier from a shareholder point of view.

EDF has been negotiating with British Energy over the price of the deal. While EDF has proposed a price of approximately 680p per share and might go up to 700p or a little more, British Energy is looking to garnering a figure of at least 735p a share.

Over the last few days, British Energy has been consulting Gleacher Shacklock, an autonomous investment bank for advice on valuing the organisation. This shows that British Energy is still negotiating with EDF but doesn’t pointedly speak of the deal moving further.

A constant uncertainty on British Energy’s future has also impacted on the government’s plan for putting together new nuclear power plants. British Energy operates eight power stations and contributes to 20% of UK’s electricity needs. But Sir Adrian has assured that British Energy will participate in building a new generation of nuclear reactors.

Sir Adrian’s suggestion of each nuclear power plant costing in the range of £2.5bn to £3bn is in tune with the price range estimated by the government but much below than the cost of the Olkiluoto, which is £4bn, being built in Finland.

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Micro-electricity suppliers criticised

Wednesday, July 2nd, 2008

2 energy suppliers whose clientele is mainly small-sized businesses has received criticism from an energy sector watchdog for exploiting the inefficiencies of the bigger energy suppliers and putting in place harsh contractual terms.
The energy sector watchdog, Energywatch has named the two guilty energy suppliers as Electricity4Business and Business Energy Solutions which supplies gas and. Energywatch has also forwarded the complaints which have been brought up by the customers the energy regulator, Ofgem.

The two energy suppliers are known to have contractual terms which give a timeframe within which the customers must have changed to another supplier upon the expiry of their existing contracts. For instance with Business Energy Solutions a customer must change to a new supplier within a span of twenty four hours while in the case of Electricity4Business a customer must change to a new supplier within a week after which their electricity supply will be cut off. In situations where the customers do not manage to switch suppliers within the respective specified times, there is automatic renewal of the long-term contracts.

At present the electricity and gas market in the United Kingdom has six large energy suppliers who are in domination. These include Npower, Scottish & Southern, British Gas, Powergen, Scottish Power and EDF. The big six have a ninety five per cent market share.

The energy sector watchdog has argued that an average of a month is required for one to switch energy suppliers but Electricity4Business has claimed that it can change the energy supplier of a customer in a very short time.

EDF UK still interested in building nuclear reactors

Wednesday, July 2nd, 2008

The chief executive officer of the United Kingdom subsidiary of Electricite de France’s or EDF disclosed that the energy giant was still interested in constructing an additional four nuclear power plants in the United Kingdom. He added that they planned to have first new nuclear reactor in operation in the next ten years.

Vincent de Rivaz, the chief executive officer of EDF UK, claimed in the city of London at a conference held on nuclear energy that they would keep the promise they have consistently made and to develop the pioneer European Pressurized Reactor in the United Kingdom which should be operational by the year 2017. The chief executive officer of EDF UK had prior to that revealed that if the conditions allowed it they could develop up to 4 new nuclear power plants in the United Kingdom.

The statement by Vincent de Rivaz is an indication that EDF was fully committed to building new nuclear power plants in the United Kingdom irrespective of what will happen to planned takeover talks of British Energy which is the largest nuclear power generator in the United Kingdom.

The government of the United Kingdom is disposing off a thirty five per cent shareholding in British Energy. By disposing off British Energy it is hoped that it will usher in construction of a new generation of nuclear power plants to supplant the old nuclear power plants which are due for decommissioning in the next decade and a half. Part of the interest in British Energy by EDF is fuelled by the fact that the sites that British Energy owns are perfect for development of new nuclear power plants.