British Energy takeover falls through
Electricite de France head says financial conditions had not been met for a takeover of the nuclear power British Energy.1 August 2008
PARIS - The head of Electricite de France said Friday that "financial conditions" had not yet been met for a takeover of the nuclear power operator British Energy.
Speaking at a press conference in Paris, EDF chairman and chief executive Pierre Gadonneix confirmed that talks ended overnight without an agreement on a takeover by the group, in which the French state is the majority shareholder.
"Following in-depth discussions, and after hearing the demands of all sides, we deem that the financial conditions allowing a major development in Britain by EDF have not currently been met," he said.
EDF, the world's largest nuclear power supplier and Europe's number one electricity producer, had been widely expected to confirm a deal to buy British Energy, which has a market value of GBP 12 billion (EUR 15.5 billion).
A source close to talks with British Energy told AFP on Thursday that the French group's directors had backed a takeover.
But a source close to the negotiations said two investment fund shareholders in British Energy were unhappy with the price offered by EDF for the British government's 35.2 percent stake, some 5.45 billion dollars according to the Dow Jones financial news agency.
The BBC reported that two shareholders, Invesco and Prudential, were holding out for a higher price owing to the surging cost of fuels.
British Energy said in a short statement to the London Stock Exchange that "advanced discussions with a party have continued but without agreement to date," leading to a sharp drop in its share price early Friday.
Gadonneix said he was "convinced" EDF, which Friday declared a 12.2 percent drop in half-term profits to EUR 3.08 billion despite higher revenues, would be "a major player in the renewal of nuclear energy in Britain".
"The trend towards nuclear power is confirmed in several countries, principally in Britain. This is an area where EDF intends to play a leading role," he said.
EDF is already bidding in partnership with French nuclear giant Areva to build several third-generation EPR reactors in Britain.
The British government has plans to renew its nuclear-power generating capacity and the assets owned by British Energy - which owns and operates eight nuclear power stations -are seen as key to any such effort.
[AFP / Expatica]