The expected announcement that EDF would buy British Energy for £12b has not come, thanks to a last minute rejection on price.
Investec and Prudential, who together own about 22% of the British Energy, felt that that the 765 pence-per-share offer was too low. They are aiming for £10 a share so there is a huge gap between the parties.
This could mean that each nuclear site now has to be sold off individually, lengthening the process considerably. Some commentators believe that the UK is now heading for more ‘lights out’ scenarios as the government’s energy policy staggers from one difficulty to another.
The Department of Business, Enterprise and Regulatory Reform (BERR) has responsibility for energy policy and controls. The department was planning to hail the deal as facilitating plans to fill the gap between our energy needs and generating capacity that will yawn open in the coming decade.
In a statement, BERR said that it would continue to watch developments closely, but closing the deal was a matter for the private sector. It reaffirmed the UK government’s commitment to nuclear power, and it said that the rise in oil prices had only made the case for new nuclear plants even stronger.
EDF, which is 85% owned by the French government, is the biggest nuclear power generator in the world.
British Energy, which generates about 20% of the UK’s electricity, is part-owned by the British government which wants to sell its stake. The firm was privatised in 1996 but ended up being bailed out in 2002 by the government after running into severe financial difficulties.