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24

RWE To Take Over British Energy

The German electric power and natural gas public utility company RWE has made an indicative all-cash offer of close to 700p a share for British Energy, UK's largest electricity generator by volume and a constituent company, in a deal that could value the BE at up to 11bn pounds

The German electric power and natural gas public utility company RWE has made an indicative all-cash offer of close to 700p a share for British Energy, UK's largest electricity generator by volume and a constituent company, in a deal that could value the BE at up to 11bn punds.

A sale at that price would raise almost 4bn pounds for the government, although the money has been earmarked for the Nuclear Liabilities Fund to pay for the clean-up of reactor sites.

EDF Energy, the UK arm of Electricité de France, is also conducting due diligence. It is understood to have initially made an offer to buy only part of British Energy, because it was reluctant to buy the nuclear generator's ageing advanced gas-cooled reactors, AGRs.

Competition from RWE will mean that EDF would have to bid for all of British Energy, including the AGRs.

Centrica, the UK energy company, had also previously submitted an all-share offer for the nuclear operator, but this is unlikely to be a favoured option.

EDF is also considering a joint bid and is in early-stage discussions about teaming up with Centrica.