11b pound bid for British Energy
Germany's RWE and Britain's Centrica have both made indicative bids for British Energy valuing the nuclear power operator at up to 11 billion pounds, sources close to the matter said.
One source said on Wednesday that RWE, Europe's third-biggest utility and the owner of British energy supplier nPower, made an all-cash proposal of just under 700 pence a share.
Another source said Centrica, which owns British Gas, had put forward an all-share bid, also pitched below 700 pence a share.
Utilities across Europe are stalking British Energy, which is the UK's only private nuclear power generator and is 35 percent owned by the British government, to take advantage of the country's new drive towards nuclear power.
Shares in British Energy, the country's biggest electricity producer, leapt by up to 5.6 percent to 741 pence on speculation of a bidding war and hopes that other potential suitors, such as Electricite de France (EDF), might enter the fray.
"RWE has set a benchmark, so that puts the pressure on other potentially interested parties," said Charles Stanley analyst Tina Cook.
RWE's proposal was submitted before March 17, when British Energy said it was in talks that could lead to a takeover or partnerships, the source said.
RWE, Centrica, British Energy and EDF all declined to comment.
Eager to reduce its exposure to energy imports, cut carbon dioxide emissions and diversify its sources of power away from fossil fuels, Britain has committed to building a new generation of nuclear power plants.
Analysts believe the sites of British Energy's existing, but ageing, power stations will play a key role in the expansion.
A source close to the matter told Reuters on Monday that EDF and RWE had approached Centrica about a possible joint bid for British Energy, which operates eight nuclear power stations and one coal-fired power plant.
Charles Stanley's Cook said some analysts were forecasting a bid of up to 900 pence a share for British Energy, but she said around 700 pence was more appropriate.
"Although British Energy is sitting on these coveted sites, and obviously will be a key player in the new British nuclear build program, they have had operational difficulties and their aging reactors are not necessarily attractive," she said.
Agencies
(China Daily 04/11/2008 page17)
