LONDON The UK's biggest electricity producer,
British Energy BGY.L, said on Friday it has received several
takeover proposals which value it at more than 10.8 billion
pounds ($21 billion).
Sources briefed on the talks said the company is in contact
with three parties: EDF (EDF.PA), a group made up of Germany's
RWE (RWEG.DE) and Spain's Iberdrola (IBE.MC), and France's Suez
The nuclear generator had received just one offer, from
EDF, by a deadline for second-round bids last Friday, said the
sources. That bid was below 700 pence per share, they added.
However, RWE and Iberdrola have since expressed interest in
making a joint bid, one of the sources said on Friday -- though
no decision has been taken on whether to proceed with an offer.
Suez is also in talks with British Energy but the company
is unlikely to bid as it has said it will not undertake such
major deals until it has completed a merger with rival Gaz de
A source briefed on Suez's thinking said the company is
more interested in taking part in UK power plant construction
than in buying British Energy.
Hence it is pursuing a co-operation agreement with the UK
generator, though it has not ruled out making an offer in a few
months if the company has found no buyer, said the source.
The stock was up 5.2 percent at 715.5 pence per share at
British Energy said it had received proposals from several
parties wishing to make a full offer for the company including
the Nuclear Liabilities Fund, which represents the government's
35 percent stake. It did not identify the potential bidders.
British Energy, based in East Kilbride, Scotland, said the
approaches are at an early stage and each requires several
weeks of further development.
Suez said on May 6 it would not decide on major investments
until its ongoing merger with rival Gaz de France GAZ.PA is
"Suez made its position clear this month and the situation
has not changed since," said the source briefed by Suez.
British Energy declined to comment. Its eight power plants,
built since 1965, have been beset by corrosion and other
technical problems in the past two years.
But the company is expected to be a key beneficiary of UK
government plans to build more nuclear power plants to resolve
a predicted electricity supply shortfall.
Despite concerns about storing nuclear waste and the cost
of building the plants, the government is keen on power plants
which do not emit large amounts of carbon dioxide.
That had sparked interest from some of Europe's biggest
EDF STILL MOST SERIOUS BIDDER
Iberdrola, which owns Scottish Power in the UK, does not
want to lead its own bid and RWE had not made an offer by last
week's second-round deadline as its original partner,
Vattenfall, had pulled out of the process.
The two are mulling a joint offer but no decision has yet
been taken, said the sources.
British Energy's shares had declined 13 percent before
Friday from a record 785p on April 25 because EDF -- which
submitted its bid last week, according to a Reuters source --
was feared to be the only potential bidder.
"The board has reviewed the proposals and has decided that
discussions should continue with all the parties concerned,"
said British Energy.
Both RWE and Germany's E.ON EONG.DE declined this week to
comment on a possible takeover while reiterating they are
interested in building nuclear power plants in the UK.
Centrica (CNA.L), the only British company previously
thought to still be in the race, was not one of the parties
which has made a bid, according to the Reuters source.
However, the Windsor-based power and gas supplier could yet
team up with another bidder such as EDF and buy some power
plants as it seeks to produce more of the power it needs for
its millions of UK customers.
Suez said it had not submitted a bid for shares in British
Energy. EDF, RWE and Iberdrola declined to comment.
(Editing by Quentin Bryar/Rory Channing/David Hulmes)
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