Potential suitor ends power station talks

A stock market listing for Europe’s biggest coal-fired power station looked certain today after talks with a potential buyer fell through.

The owners of Drax have been running a dual process to discover if a sale or a flotation represented the best step for the North Yorkshire site, which provides enough power to meet 7% of the UK’s electricity needs.

Drax said the last remaining bid party – a consortium led by US-based energy giant Constellation – pulled out when it became clear that shareholders were committed to a refinancing and listing due next month.

Constellation and its bid partners were thought to have offered more than £2bn (€2.9bn) for Drax, which is currently owned by its creditors after going into administration when US power giant TXU collapsed.

Two other potential offers, including a joint proposal from International Power and Japanese partner Mitsui, were withdrawn earlier this month.

In a statement Drax said meetings between the consortium and investors showed that a “significant majority” remained committed to the refinancing and listing, which is expected to be effective on December 15.