Nuclear plan in disarray as deal stalls

By John Bowker and Marie Maitre

LONDON/PARIS (Reuters) - The drive for more nuclear power is in disarray after key British Energy investors rejected a 12 billion pound takeover bid by EDF, derailing the French group's expansion plans.

EDF, the world's biggest single producer of nuclear energy and one of the few companies with the expertise to build new nuclear power stations, said on Friday it had failed to reach an agreement to buy British Energy, whose land around existing power plants is viewed as the best site for new developments.

A source close to the matter said leading private shareholders in British Energy had rejected EDF's proposal as too low, but added talks between the companies were continuing.

EDF had all but secured approval from the firm for a cash offer in the region of 775 pence a share, with the potential of future payments based on electricity prices, the source told Reuters, but some investors then rejected it.

A source close to EDF said 15-percent British Energy shareholder Invesco was likely to have been involved in the decision. An Invesco fund manager declined to comment.

The government, which owns 35 percent of British Energy and wants more nuclear power to help cut carbon emissions and reduce its reliance on imports, said it was disappointed.

"We thought it was a good deal, we were ready to accept the deal," Business Minister John Hutton said in a statement.

If a deal cannot be revived, British Energy has said it will look for partnerships with other companies to develop new power plants. But this could take longer, at a time when many of its existing eight plants are coming toward the end of their lives.