EDF may walk from British Energy auction

Source: Energy Digital

Date :17/06/2008 16:45:49

French power giant EDF Energy is is also prepared to leave the negotiating table as other bidders for British Energy fall away

After the withdrawal of Spain’s Iberdrola, and the rejection of offers from Germany’s RWE and EDF Energy, British Energy’s Sir Adrian Montague (pictured) could call off the £11 billion auction and ‘return to Plan A’, a series of joint ventures.

Some of the group’s largest shareholders opposed EDF’s £7 per share bid, which they say did not recognize the soaring cost of wholesale electricity. Experts claim that £11 per share for British Energy would be a reasonable valuation.

While it has been suggested that EDF may be willing to raise the stakes, the currently frugal company will be unwilling to meet that demanded by BE’s shareholders.

EDF believes that it would be a mistake to estimate the future of the UK’s nuclear industry by today’s soaring cost structures, and is prepared to withdraw if a way forward cannot be found.

Britain’s energy group, Centrica, is likely to seek a role in any joint venture, as is American concern Suez.