Breakingviews | EDF/British Energy

Considered view

01 Aug 2008 13:45

Pulling the plug

Context News

British Energy, which operates most of the UK’s nuclear power stations, rejected a £12bn bid from EDF, French government-controlled utility, late on July 31. The UK government has a 35% interest in British Energy’s net cash flows, which translates into 35% of the voting rights when an offer is accepted. The government supported EDF’s offer.

The UK nuclear group rejected EDF’s £12bn bid as being too low after last minute pressure from shareholders. A higher price relies on heroic assumptions about oil prices and the reliability of British Energy’s ageing reactors. It’s hard to see EDF returning with a higher offer.

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