BRITISH Energy was yesterday at the centre of speculation that EDF, the French nuclear giant, was set to make a bid for the company.
French newspaper La Tribune reported that the board of Électricité de France had approved a bid for control of the Livingston-based company, the UK's largest nuclear power generator.
Shares in British Energy, which produces around a sixt
h of the UK's electricity, rose to an 18-month high yesterday, up 48.5p to 711p, valuing the company at £7.35 billion. The price of shares in the Livingston-based firm has increased 44 per cent in the past seven weeks since rumours of a possible takeover began circulating.
The UK government owns a 35.2 per cent stake in British Energy, a legacy of a rescue package in 2003. It has hired UBS to advise it on the development of new nuclear capacity, which could include a sale of the stake.
Last month British Energy said it was in talks over the development of new nuclear capacity, which could lead to a takeover bid. This announcement followed comments from the Business Secretary, John Hutton, that nuclear energy would play an increasing part of the UK's energy mix in the future.
Yesterday both British Energy and a spokesman for Hutton declined to comment on the reports.
German utility E.ON, British Gas owner Centrica and Spanish Iberdrola, owners of ScottishPower, have all been raised as possible suitors in recent weeks.
EDF's interest would mark a second possible major acquisition for the company, majority-owned by the French government, this year. In January French officials confirmed that EDF could table a bid for Iberdrola in conjunction with Spanish construction company ACS.
But there was immediate scepticism among analysts over EDF's chances of winning control of British Energy. CM-CIC Securities told clients that the chances of EDF successfully taking over British Energy were "practically nil", given the company's existing large presence in the UK through EDF Energy.
The full article contains 337 words and appears in The Scotsman newspaper.
