Centrica may offer cash for B.Energy stake

LONDON (Reuters) - Centrica (CNA.L) is ready to offer a cash sweetener for the government's stake in British Energy in order to gain backing for a merger with the nuclear power generator, sources familiar with the matter told Reuters.

Media reports on Sunday suggested the owner of British Gas could be willing to pay up to 4 billion pounds for part or all of the government's 35-percent stake in British Energy.

"A possible scenario is that they'll try and get some cash involved. Centrica's balance sheet is good and it has no debt so they've got room to manoeuvre in that regard," a source said.

Centrica, which declined to comment on the reports, said last week it might revive plans to merge with British Energy after French group EDF's 12 billion pound bid for the nuclear power firm stalled.

However, a government spokesman told Reuters last week that Britain's preferred option remains a takeover by EDF, because it has experience in building nuclear power plants.

"The comments from the government suggested to Centrica that they have to put a cash element in there," the source said.

The government gave the green light in January to a new fleet of nuclear power stations to help cut carbon emissions and reduce its reliance on energy imports.

This sparked takeover interest in British Energy, which lacks the expertise to build new plants itself but whose land is viewed as the best site for new developments.

(Reporting by Matthew Scuffham and John Bowker; Editing by Jason Neely)