British Energy says no agreement with EDF

August 1, 2008
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, LONDON, August 1 – British Energy, the nuclear power operator, said Friday that it had yet to reach an agreement regarding a takeover by French energy giant EDF.

British Energy said in a short statement to the London Stock Exchange that "advanced discussions with a party have continued but without agreement to date."

State electricity company Electricite de France had said overnight that conditions were not right for "a major development in Great Britain," apparently giving up an imminent bid for British Energy, which has a market value of about 24 billion dollars (15.5 billion euros).

"After in depth discussions, EDF considers that the conditions for a major development in Great Britain are not met to date," the French group had said in a brief statement also without explicitly mentioning British Energy.

A source close to talks with British Energy had said that EDF might make an official announcement Friday of a bid to acquire the British nuclear power operator after the French group\’s directors backed the move.

EDF, the world\’s largest nuclear power suppliers and already Europe\’s number one electricity producer, has invited journalists and analysts to a press conference on Friday following the release of its first half results.

The company traditionally does not hold press conferences after publishing results.

EDF announced Friday a 12.2 percent drop in first-half net income to 3.08 billion euros compared to the same period last year, a decline it attributed to "cost pressures".

Sales rose 6.4 percent to 32.24 billion euros.

The source had told AFP late Thursday that the EDF executive board had "put forward an offer to buy British Energy," without giving details of the sum involved.

The bid was said to have been in the form of either a cash-only deal worth 765 pence per share or a cash option worth 700 pence a share plus shares, according to the Dow Jones financial news agency.

The offer was aimed at the British government\’s 35.2 percent stake in British Energy. Under British takeover rules, any bid for the government stake would trigger an offer for the rest of group.

British Energy provides almost one fifth of Britain\’s electricity and owns and operates eight nuclear power stations.

Last month, British Energy said that a series of takeover proposals received from unnamed parties had undervalued the company.

The British government, meanwhile, wants to see a renewal of its nuclear-power generating capacity and the assets owned by British Energy are seen as a springboard for any such effort.

An EDF-British Energy tie-up, which could also include the participation of British gas group Centrica, would strengthen EDF\’s presence in Europe. It now wants to focus its operations there after having withdrawn from Brazil and Argentina in 2007.

EDF is already active in Britain through its subsidiary EDF Energy, as well as in Germany and Italy. It currently has 126.7 gigawatts of installed power throughout the world, of which 124.5 are in Europe.

The company is 84.8 percent controlled by the state, 13.3 percent by institutional and other investors and 1.9 percent by its employees.

With a market capitalisation of 101.7 billion euros, it is the second largest French company after oil giant Total. The group had a net profit of 5.5 billion euros in 2007 from sales of 59.6 billion euros.

EDF has 38 million customers worldwide, of whom 28 million are in France, where it operates 58 nuclear reactors spread over 19 different sites, according to its website.

Shares in EDF closed up 3.06 percent on the Paris bourse at 55.95 euros on Thursday.

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