Euro Firms May Join Centrica in Bid for BE

European power firms are courting British Gas owner Centrica about a possible Pounds 10bn-plus joint bid for British Energy (BE).

A clutch of continental power companies – led by France’s EDF and Germany’s RWE – are said to be vying to take control of BE, which operates most of Britain’s nuclear power stations – plus Yorkshire’s Eggborough coal-fired power station – and is expected to play a major role in the proposed development of the next generation of nuclear power supply.

Centrica is thought to have been keen to bid on its own, but it has been held back by a lack of financial firepower and declining share price.

It is now being approached by European firms as Centrica’s involvement would water down criticisms of strategic industries going to foreign owners.

Centrica has started talks with EDF about “a British-led solution” over the future of British Energy, said The Sunday Telegraph. A proposal would involve buying the Government’s 35 per cent holding as well as the company’s listed majority stake.

In addition to its financial handicap, Centrica’s lack of expertise in the nuclear industry may encourage the Government to consider an EDF approach.

The company operates 19 nuclear sites in France, where it supplies more than 80 per cent of the country’s power needs.

The group also has extensive operations across Europe, with its British arm EDF Energy boasting 5.1 million gas and electricity customers.

EDF’s directors are said to have given the green light to proceed with an offer for the company.

Any takeover for British Energy may see EDF forced to sell some of its British assets to avoid Britain’s nuclear capacity being in the hands of a single overseas business.

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