EDF has other cards to play without BE

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

EDF was due to unveil a full cash 12 billion pound offer for British Energy on Friday, after months of talks and securing approval from the UK government, which owns 35 percent of the British nuclear power plant group.

But institutional investors in British Energy unexpectedly rejected a bid they deemed too low, sending EDF back to the negotiating table, and threatening to derail a deal some see as crucial for Britain's nuclear rebirth and EDF's expansion plans.

Although both companies are still talking, industry experts and market players believe EDF is unlikely to up the ante and risk overpaying for British Energy, the owner of most of Britain's existing nuclear power plants and whose land around existing sites is viewed as the locations for new developments.

"EDF doesn't seem ready to make an acquisition at any cost and this is rather good news for investors," said fund manager Jacques-Antoine Bretteil at International Capital Gestion.

But failing to close in on British Energy would not mark the end of EDF's ambitions in Britain, industry experts said.

British utility Centrica said it might revive plans to merge with British Energy. However, a government spokesman told Reuters on Monday that Britain's preferred option remains a takeover by EDF.

ALTERNATIVE SCENARIOS

"British Energy would have been an ideal entry point for EDF, and EDF may have regrets about the deal not happening, but this doesn't at all slam the British nuclear door in their face," said Colette Lewiner, and energy sector expert at French management consultancy Capgemini.

"If a deal does not materialise, British Energy will be encouraged to strike partnerships on (new nuclear) sites, so it will just involve a different scenario for EDF," she added.

• 1
• 2
• 3