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British Energy gets bid approaches at premium

British nuclear power generator British Energy said it has received a range of takeover proposals, including some priced above Thursday’s closing share price of 680 pence per share, sending its shares higher. BE gets three bid approaches a source familiar with the matter told Reuters on Friday.

The stock was up 5.6% at 718 pence per share by 0802 GMT, valuing it around £11.4 billion ($22.19 billion) including the UK government’s 35% stake. British Energy said on Friday it had received a range of proposals from several parties wishing to make a full offer for the company including the Nuclear Liabilities Fund, which represents the government stake.

 The company operates eight nuclear power stations and is the key player in a government drive towards more nuclear power to solve a predicted electricity supply shortfall. Its shares had declined 13% before Friday from a 785p all-time high on April 25 as hopes of a bidding war at a significant premium to its share price faded.

“The weakness in the price has been because people thought it would only be EdF (that made a bid),” said analyst Lakis Athanasiou at broker Evolution Securities. “The key today is there are a number of players,” he said. Germany’s RWE, Spain’s Iberdrola, France’s Suez, Britain’s Centrica, Scottish and Southern Energy and Germany’s E.ON, owner of Britain’s Powergen, could be behind the bids, Athanasiou said.

The process of evaluating the proposals is likely to take a number of weeks, British Energy said. “It is clear that the press speculation that only EDF had made a bid, with some reports putting the bid as low as 650p, was misleading and contributed to price weakness in recent days,” Athanasiou said.

Britain’s biggest gas supplier Centrica and utility EdF were prepared to make offers at less than 700p/share, sources familiar with the matter told Reuters last week. Centrica made an all-share indicative offer at under 700p/share, a source told Reuters last week. “The board has reviewed the proposals and has decided that discussions should continue with all the parties concerned,” said British Energy. Spain’s Iberdrola is also interested, an industry source told Reuters last week.


The potential bidders are French utility EdF, France’s Suez and a combined proposal from Germany’s RWE and Spain’s Iberdrola, the source said. Sources familiar with the matter told Reuters last week, that EdF was the only bidder to make a proposal by a deadline then, hitting British Energy shares as hopes of a bidding war faded.

British Energy has received two further proposals since last week, the source said on Friday. British Energy said earlier that it had received a range of proposals from several parties, but that they were at an early stage. It declined further comment. EdF, RWE, Iberdrola and Suez declined to comment. (Reuters)