Page last updated at 15:31 GMT, Friday, 9 May 2008 16:31 UK

French swoop for British Energy

By Nils Blythe
Business correspondent, BBC News

Hartlepool power station
British Energy has suffered from rising costs in recent years

The giant French-based utility EDF has made a takeover offer for the UK's nuclear power firm British Energy.

British Energy invited offers from interested buyers and set a deadline of Friday for them to table bids.

EDF submitted a proposal to British Energy's board on Friday morning but has not disclosed the price.

The BBC has learned that no other offers have been made, but counter-bids made in the near future would still be given serious consideration.

British Energy shares fell by more than 2% on Friday to 700 pence amid speculation that the EDF offer may be below that level.

British Energy shares have risen almost 40% since it emerged in March that British Energy's board was considering a break-up or a sale.

A number of companies other than EDF had shown an interest in bidding for British Energy, including Germany's RWE, Spain's Iberdrola and British Gas owner Centrica.

Power player

British Energy has eight nuclear power stations generating about 20% of the UK's electricity.

What makes the firm attractive is that the British government has given the green light for the building of a new generation of nuclear power plants, and British Energy's sites are considered prime locations for the developments.

The government owns a 35% stake in British Energy and has indicated that it is prepared to sell at the right price.

It has also made it clear that it does not regard the nationality of a company making an offer for the taxpayer's holding in British Energy as an important issue.

EDF is 84% owned by the French government. It operates 58 nuclear power stations in France and has already submitted the design of the plants it wants to build in Britain for regulatory approval.

If EDF is successful in its bid for British Energy, it looks set to play a key role in funding and developing the new generation of nuclear power stations, which the government considers essential for the UK's future energy security.

'Inconsistent'

Even so, both Centrica and the German-based E.On remain keen to develop new nuclear power plants in Britain.

And while British Energy has some of the locations which the industry considers most suitable for new nuclear developments, there are other sites available.

Energy minister Malcolm Wicks told the BBC that: "I very much anticipate that more than one company will be in the nuclear business in Britain.

"And in terms of our competitive energy market that is something we would support," he added.

The minister argued that - whatever the outcome of the bidding process for British Energy - there were other sites with potential for new nuclear developments, including a number controlled by the Nuclear De-commissioning Authority.

Britain's Conservative party spokesman on energy, Alan Duncan, has called for greater clarity about the government's policy.

"On the one hand, the government say they don't mind if all of British Energy falls into foreign hands, then on the other, they say that it would be unacceptable to see one company dominate the nuclear sector," he said.

"These two statements are inconsistent."


SEE ALSO
EDF 'may bid for British Energy'
11 Apr 08 |  Business
RWE in 'offer for British Energy'
10 Apr 08 |  Business
Centrica 'eyeing British Energy'
06 Apr 08 |  Business
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

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