Iberdrola pulls back from British Energy bidding war

IBERDROLA yesterday came close to completely ruling out a bid for British Energy but revealed that it harboured an ambition to be part of plans to build the next generation of nuclear power stations in the UK.

The ScottishPower owner refused to concede outright it had abandoned any hope of taking over the UK's nuclear generation company but made it clear that an approach for the Livingston-based firm was now unlikely.

East Kilbride-based British Energy, the UK's main nuclear power generator, has attracted some of Europe's largest utilities into a bidding war since confirming last month it was in talks which could lead to a takeover.

Iberdrola's chairman and chief executive, Ignacio Sánchez Galán, told a press conference here yesterday that the company was obliged to investigate the opportunities but said any deal would only be approached if he could guarantee shareholders it would increase earnings per share.

He said: "We are already in the UK and the UK is an important market for us, so we are obliged to consider each and every opportunity in the market."

However, his comments were notably cool compared to his thoughts on a possible expansion in the United States where he said there are "lots and lots of opportunities".

And later, ScottishPower's Spanish chief executive, José Luis del Valle, confirmed the company was not close to tabling a bid for British Energy. He said: "I don't think we're there yet."

German RWE and British Gas owner Centrica are believed to have tabled bids for British Energy and French EDF is thought to be close to making an offer.

Del Valle admitted Iberdrola was behind the other players but was not apologetic. He added that it was "too early" to talk to other companies about a joint bid for nuclear sites in the UK.

Although the company will not formally rule out a move for British Energy, it is clear that its focus is more on other possibilities for developing nuclear power plants in the UK.

However, del Valle, who is also Iberdrola's strategy director and is viewed in Spain as a leading candidate to succeed Galán, said Iberdrola still planned to play a role in nuclear in the UK.

He said: "What we are interested in is the future – the future development of nuclear in the UK is something that is clearly of interest to us."

He added: "There might be opportunities if someone else buys British Energy, there might be sites become available, from British Energy or sites from the nuclear decommissioning authority... there will be other opportunities in the UK for nuclear besides British Energy."

Iberdrola is itself the subject of a possible takeover battle, with French EDF and Spanish construction group, ACS mulling a possible approach.

Gálán said yesterday that EDF should either bid for the Spanish utility or "shut up", adding that 100 billion could be a starting point for any buyer. "What we are saying to EDF ... is that it should make an offer or that it shuts up," Gálán said.

Asked if the company was worth 100bn, Gálán said it was "not a bad place to start talking". The figure is around double its current market capitalisation.