[UNITED KINGDOM] British Energy bidding war hopes wither

Hopes of a bidding war for nuclear power generator British Energy faded yesterday as Germany's RWE did not make a bid by the day's deadline. Spain's Iberdrola also did not make an offer for British Energy yesterday, but did not rule out a future offer, an industry source said.

When the UK government put its 35 per cent stake in the firm up for sale, many of Europe's largest utilities showed interest.

But as the deadline loomed, some fell away and none seemed set to offer more than the shares have recently traded at. British Energy shares ended down 2pc at 701 pence, up from a low of 685p, valuing the government's stake at about £3.5 billion ($6.83bn).

German utility RWE, which was set to bid less than 700 pence a share, did not make an offer yesterday after Swedish partner Vattenfall pulled out of the auction having faced pressure from its owner, the Swedish government, according to sources familiar with the matter. RWE could get involved at a later date, however, either alone or with a different partner. "RWE are not necessarily walking away," one of the sources said.

"Iberdrola has not submitted an offer for British Energy, but no final decision has been taken," an industry source said, meanwhile, adding that the firm was still interested in taking part in Britain's new nuclear building programme.

France's EDF, expected to offer "substantially" less than 700 pence per share, has made an offer for the company without a partner, however, according to sources familiar with the matter.

Yesterday's second-round bid deadline was for formal offers with details of financing, said the sources, adding however that these are not final binding bids and there may be a third round, meaning, for instance, that RWE would be able to make an offer at a later date if it chose to. The UK's main gas provider, Centrica, the only British firm still in the race, will not improve on an indicative all-share offer of under 700 pence, an industry source said.

The company, which despite needing power generation to supply its customers is widely seen as too small to make its own cash bid, is in talks with EDF and Iberdrola about possible joint possible offers.
UNITED KINGDOM: British Energy bidding war hopes wither

Source: Gulf Daily News

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