Bid talk sends British Energy up

The UK government wants to include nuclear in its energy mix

Shares in British Energy have climbed sharply after it said it was in talks that could lead to a "business combination or an offer" for the firm.

The company saw its shares rise nearly 19% to 680 pence a share after saying it was talking to "interested parties".

The firm has been looking to develop new plants after the government said it was committed to using nuclear energy to meet climate change targets.

British Energy operates eight nuclear power stations in the UK.

But its profits were recently hit by mounting costs.

Profits dropped 4% for the nine months to the end of December as costs, including those related to limiting its impact on the environment, rose.

The company, which is 35% owned by the British government, was forced to shut down four reactors at the end of 2007 after problems with boiler closure units.

Though the firm confirmed on Monday that talks were underway, it added that there could be "no certainty" that any offer would be made.

The firm's shares ended the day up 11.2% at 635.50p.