French utility EDF launched a Ł12.5 billion ($23.14 billion) agreed bid for nuclear operator British Energy, in a revamped offer to take control of Britain's nuclear power industry.
EDF, the world's biggest maker of nuclear energy, said on Wednesday it was offering 774 pence per British Energy share. It also proposed an alternative of 700 pence in cash plus one nuclear power note, a financial instrument linked to BE's future performance.
The agreement follows months of wrangling.
The British government, which owns 35% of British Energy, accepted an earlier proposed offer from EDF but investors Invesco and M&G, which own around 22% of the company, turned it down as too low.
The new offer is worth just 9 pence a share more.
The deal prompted Natixis analysts to raise their recommendation on EDF shares to “buy” from “reduce” saying the acquisition made “great industrial sense.”
EDF said it had received assurances from British Energy investors it would get at least 45.16% of the utility.
“We are delighted that the British Energy board has unanimously accepted this offer … This paves the way for investment in the UK,” said EDF Chairman Pierre Gadonneix.
“It is positive for EDF and takes away the risk that they will pay off the wall, and the price is reasonable...,” a London-based analyst said. “There is clearly value in nuclear and building nuclear plants but it is quite long term.”
For the British government, EDF's nuclear expertise means it can meet its objectives on climate change and energy security, at a time of increasing demand for energy and diminishing natural resources.
For EDF, the takeover allows it to benefit from the growing British nuclear market where it plans to build four European Pressurized Reactors (EPR), kickstarting a new wave of nuclear building in the country.
Britain's nuclear power plants provide 19% of the country's electricity. However, all but one are due to be closed within 15 years.
Britain's Industry Minister John Hutton said last week the government would step up its campaign for new nuclear power stations, arguing they were vital for energy security, climate change and job creation. (Reuters)