So they finally did get it together, after all. Less than two months after the mid-summer tie-up between French energy giant EDF and British Energy was scuppered by leading institutional shareholders, the £12.5bn marriage is back on. EDF will now be taking over Britain’s nuclear power industry, responsible for 19% of the nation’s overall electricity supply. Shareholders can choose either £7.74 in cash – 1% more than last time – or £7 per share plus a CVR, an option that allows them to participate in any upside. The UK Government has decided to cash up its 35% BE stake “for the certainty of jam today over nuclear-powered jam tomorrow”, said the FT’s Lex. That “looks like a wise decision”, given the uncertainties in the years ahead over the price of power over the next ten years and the amount of electricity that British Energy will actually produce.
The deal “kick starts the Government’s drive to facilitate new nuclear build”, said Charles Stanley’s Tina Cooke, “BE’s existing assets are ageing, and EDF will contribute its expertise and replace those assets.” Some will see the deal as “handing the UK’s nuclear future to a French state-owned company”, noted BBC’s Robert Peston. But that’s overblown, says energy expert Malcolm Grimston. These days the industry “is dominated by firms operating across borders”.
• EDF €52; 12m change 29%
• BGY 769p; 12m change 40%