EDF close to sealing takeover deal

French energy firm EDF was today said to be close to winning the shareholder support it needs to seal a £12bn (€15bn) takeover of British Energy.

EDF has reportedly improved the terms of its previous bid and is now hopeful of swaying fund manager Invesco – owner of 15% of BE – into ending its opposition to its proposed takeover of the nuclear power generator.

Combined with the government’s share, the French company could then count on sufficient support for British Energy’s directors to recommend acceptance, the Sunday Times said. The other rebel shareholder, M&G, is still thought to be pushing for a BE merger with British Gas owner Centrica.

In July, EDF offered 765p for each British Energy share, valuing the company at about £12bn (€15bn). Shareholders could choose to take the cash, or 700p plus a slice of the company’s future profits.

This was rejected by Invesco and M&G amid concerns the deal undervalued British Energy at a time when the value of energy assets was rising. However, oil’s fall from July’s peak is likely to have persuaded some investors to be more flexible over price demands.

A deal, which is seen as key to kick-starting Britain’s programme to build new nuclear power stations, could be announced before the Labour party conference, which starts on September 20. That is three days after an EDF board meeting.

The government has a 36% stake in the generator and came out in favour of the previous deal.

EDF is majority owned by the French government and a takeover would put the UK’s nuclear destiny in foreign hands. EDF would have a leading role in the next generation of UK nuclear power stations, which are likely to be built on BE’s existing sites.

If an EDF takeover goes ahead, British Gas owner Centrica is expected to take a minority stake in the business.

Centrica is considering a number of other options including an all-share merger with BE if the EDF takeover deal falls through. It is also mooting a long-term deal to buy power from BE, as well as participating in its potential new nuclear developments.