Page last updated at 11:44 GMT, Sunday, 6 April 2008 12:44 UK

Centrica 'eyeing British Energy'

Hartlepool power station
British Energy has been hit by mounting costs

British Gas parent Centrica is in talks with European firms about a 10bn joint bid for British Energy, say reports.

France's EDF and Germany's RWE are said to be key firms interested in joining Centrica to buy the UK government's 35% stake in nuclear firm British Energy.

Reports also name Germany's Eon and Spain's Iberdrola as interested.

British Energy has been looking to develop new plants after the government said it was committed to using nuclear energy but it has faced mounting costs.

'Business combination'

Shares in British Energy, which operates eight nuclear power stations in the UK, hit their highest level in 20 months on Friday amid speculation about a bid from EDF for the nuclear firm.

EDF, which already has a strong presence in the UK since acquiring London Electricity, is one of Europe's leading nuclear energy firms.

In March British Energy confirmed it was in negotiations that could lead to a "business combination or an offer" for the firm.

A bid from Centrica would be to secure a "British led solution" for the future of the UK's nuclear industry, said The Sunday Telegraph.

Industry opposition

The government has faced strong opposition from the industry over the possibility that the firm could end up in foreign hands, leading to job losses in the UK, the newspaper added.

While the government has expressed its commitment to a new generation of nuclear plants in an attempt to tackle climate change, the firm has faced difficulties.

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

The company - 35% owned by the British government - had to shut down four reactors at the end of 2007 after problems with boiler closure units.


SEE ALSO
Bid talk sends British Energy up
17 Mar 08 |  Business
Profits fall at British Energy
13 Feb 08 |  Business
Reactor woes hurt British Energy
13 Nov 07 |  Business
Nuclear delays hit British Energy
07 Nov 07 |  Business
Nuclear woes hit British Energy
22 Oct 07 |  Business
Outages hit British Energy profit
16 Aug 07 |  Business

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