Power firm confirms British Energy withdrawal

The auction of nuclear power firm British Energy suffered a blow today after it emerged one of the potential suitors had pulled out of the running.

Spanish utility giant Iberdrola – parent company of Scottish Power – confirmed it will not table an offer for British Energy, saying the company’s price tag was too high.

British Energy said on Monday that it had dismissed a number of takeover approaches as not “representing shareholder value”.

The company, which had been considering offers for the past few weeks, said none were above the 735p-a-share closing share price on Friday.

Iberdrola’s move leaves less competition for electricity provider EDF, which is seen as front-runner to land British Energy.

It is thought that Iberdrola’s reported bidding partner RWE, which owns npower, is still considering a bid for the firm.

A spokesman for Iberdrola said today that British Energy has “high expectations of a price” for the sale, although he added that the firm was still interested in taking part in the future development of nuclear plants in the UK.

RWE declined to comment.

British Energy said on Monday that none of the approaches represented the true value of the company or took into account the current forward price of electricity and the value of the group’s nuclear development potential.

British Energy (BE) operates all eight of Britain’s nuclear power stations and should play a major role in the proposed development of the next generation of nuclear power supply.

It received a number of approaches last month, but EDF is understood to be the only firm to have made a firm offer.

British Energy said in March it had received takeover approaches, reportedly prompting due diligence interest from five parties in all.

The UK Government is considering the future of its 36% stake in the firm, having sold a 25% stake in the company last year for £2.08bn (€2.6bn).

BE has 6,000 staff and produces around one-sixth of the UK’s electricity.

Its eight nuclear power stations are Dungeness B in Kent, Hartlepool, Heysham 1 and 2 in Lancashire, Hinkley Point B in Somerset, Hunterston B in Ayrshire, Sizewell B in Suffolk and Torness in East Lothian.

It also owns a coal-fired power station at Eggborough, East Yorkshire.