Großbritannien : May 16, 2008

Late in 2007, a meeting was convened by the chairman of British Energy (BE) following speculation that the use of nuclear power was about to once again become fashionable within the country. By the time the British government’s intentions regarding this subject had been made clear, an unofficial auction of BE was already under way.

In April, a growing number of energy companies, including EDF and Suez of France, RWE and Eon of Germany, Iberderola of Spain and Britian’s Centrica, were interested in acquiring BE. However, Centrica early on stated that it did not have the capital resources to acquire BE on its own and its participation in such a takeover would need to be part of an overall consortium. The fact that all but one of the prospective buyers were foreign-owned did not seem to bother the British government who stated, “We are used to foreign ownership of energy suppliers in the UK. We are relaxed about it.”

In the early stages of the process it became clear that only one company, France’s EDF, was going to bid for BE. This raised a concern that EDF could not generate enough electricity for all its UK customers and therefore would use all of the 18 percent of total power generated by nuclear in this country. This would in turn force other energy companies to pay more on the wholesale markets.

The British Government, along with its advisers UBS, have remained relatively tight lipped throughout this entire process. However, the Government was keen to ensure two key criteria were fulfilled in any sale of BE. First, more than one bidder would be involved in any auction of BE and second, at least two operating companies would use different nuclear technologies. Therefore, it is hoped that the aforementioned stipulations would ensure the continuity of supply should problems develop in the future with any particular nuclear technology.

Hopes of a takeover battle for BE have all but evaporated with EDF being the only company tabling a firm offer with such offer being much lower than expected. However, it has been reported that RWE and Iberderola have not ruled out making a bid for BE. A lack of bids for BE means the Government may now be willing to entertain offers consisting of shares and cash thereby allowing Centrica to enter the process as a bidder in its own right.