EDF launches £12.5bn British Energy bid
Wednesday, 24 Sep 2008 09:23
EDF plans to build a new fleet of nuclear power stations in the UK
British Energy has agreed to a £12.5 billion takeover offer from French energy firm EDF.
The revised offer of 774p per share persuaded British Energy's institutional shareholders to accept the bid, after a previous offer of 9p per share less was rejected.
The board is unanimously recommending the offer to all its shareholders.
The sale will provide a windfall for the government, which has a 36 per cent stake in British Energy.
EDF will run British Energy's eight nuclear power stations and one coal-fired plant, and has agreed to build four new reactors, as well as dispose of certain sites to encourage other operators to enter the market.
British Gas owner Centrica, which had previously signalled interest in taking over British Energy, has acquired a 25 per cent stake in Lake Acquisitions, EDF's wholly-owned subsidiary that bought and will run the operation.
Centrica's involvement may make the sale of nuclear sites to a foreign company more palatable to those opposed to the deal.
The government was said to be keen to bring EDF in however, as the French company already runs 58 reactors and will have the necessary experience to build a new fleet in Britain.
Prime minister Gordon Brown said: "New nuclear is becoming a reality. This deal is good value for the taxpayer and a significant step towards the construction of a new generation of nuclear stations to power the country.
"Nuclear is clean, secure and affordable; its expansion is crucial for Britain's long term energy security, as we reduce our oil dependence and move towards a low carbon future."
Sir Adrian Montague, chairman of British Energy, said: "Together, the businesses of EDF and British Energy will have broader access to markets and a unique blend of engineering expertise, project management skills and physical assets available for the development of new nuclear build in the UK."
British Energy is the UK's largest electricity generator, employing 6,000 people. EDF said it would look forward to welcoming British Energy's management and employees into the enlarged group.