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| British Energy rejects takeover | British Energy rejects takeover |
| (20 minutes later) | |
| British Energy has rejected a deal which would have seen eight of the UK's nuclear power stations sold to a French state-owned energy firm. | British Energy has rejected a deal which would have seen eight of the UK's nuclear power stations sold to a French state-owned energy firm. |
| EDF had been expected to announce a £12bn deal to buy British Energy. | EDF had been expected to announce a £12bn deal to buy British Energy. |
| However, it is understood that shareholders argued that the soaring price of energy meant they should be able to command a higher offer. | However, it is understood that shareholders argued that the soaring price of energy meant they should be able to command a higher offer. |
| The rejection is a major setback to the UK's plans to cut greenhouse gases by relying more on nuclear energy. | The rejection is a major setback to the UK's plans to cut greenhouse gases by relying more on nuclear energy. |
| The government holds a 35% stake in British Energy and is believed to have backed the deal, which would have raised as much as £4bn for the chancellor. | The government holds a 35% stake in British Energy and is believed to have backed the deal, which would have raised as much as £4bn for the chancellor. |
| But Investec and Prudential, who together own about 22% of the firm, felt that that the 765 pence-per-share offer was too low, said the BBC Business Editor, Robert Peston. | |
| On Friday, British Energy shares were trading at just under £6 each. | |
| 'Embarrassment' | 'Embarrassment' |
| Although the deal could yet be revived, the latest development was bound to be a disappointment for the government which wants to get the building of new nuclear power stations under way as soon as possible to replace the ageing Magnox reactors, our business editor said. | |
| Arguably all of this mess could have been avoided if BERR last year hadn't sold part of its British Energy stake Robert PestonBBC Business Editor Read Robert's thoughts | Arguably all of this mess could have been avoided if BERR last year hadn't sold part of its British Energy stake Robert PestonBBC Business Editor Read Robert's thoughts |
| He added it was an "embarrassment" to the Department of Business, Enterprise and Regulatory Reform (BERR) which has responsibility for energy policy and controls. | He added it was an "embarrassment" to the Department of Business, Enterprise and Regulatory Reform (BERR) which has responsibility for energy policy and controls. |
| "The department was planning to hail the deal as facilitating plans to fill the gap between our energy needs and generating capacity that will yawn open in the coming decade." | "The department was planning to hail the deal as facilitating plans to fill the gap between our energy needs and generating capacity that will yawn open in the coming decade." |
| In a statement, BERR said that it would continue to watch developments closely, but closing the deal was a matter for the private sector. | In a statement, BERR said that it would continue to watch developments closely, but closing the deal was a matter for the private sector. |
| But it reaffirmed the UK government's commitment to nuclear power, and it said that the rise in oil prices had only made the case for new nuclear plants even stronger. | But it reaffirmed the UK government's commitment to nuclear power, and it said that the rise in oil prices had only made the case for new nuclear plants even stronger. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| Both companies issued terse statements about the breakdown of the talks. | Both companies issued terse statements about the breakdown of the talks. |
| EDF said that conditions were not right for it to proceed with the deal. | EDF said that conditions were not right for it to proceed with the deal. |
| British Energy said "advanced discussions" had continued but that no agreement had been made to date. | British Energy said "advanced discussions" had continued but that no agreement had been made to date. |
| It added that there could be no certainty that the talks would lead to an offer being made. | It added that there could be no certainty that the talks would lead to an offer being made. |
| The chairman of the Commons Business and Enterprise Committee, Conservative MP Peter Luff, said the collapse of the deal was not necessarily a bad thing. | The chairman of the Commons Business and Enterprise Committee, Conservative MP Peter Luff, said the collapse of the deal was not necessarily a bad thing. |
| The level of interest in nuclear new build remains high... there are strong signals of an appetite for this from the market Department for Business spokesman | The level of interest in nuclear new build remains high... there are strong signals of an appetite for this from the market Department for Business spokesman |
| The French firm buying BE would have meant "a massive concentration of power in the electricity sector in the hands of EDF", he said. | The French firm buying BE would have meant "a massive concentration of power in the electricity sector in the hands of EDF", he said. |
| "They'd have had over a quarter of all electricity generation and the competition effect would've been very serious." | "They'd have had over a quarter of all electricity generation and the competition effect would've been very serious." |
| EDF, which is 85% owned by the French government, is the biggest nuclear power generator in the world. | EDF, which is 85% owned by the French government, is the biggest nuclear power generator in the world. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| "After in-depth discussions, EDF considers that the conditions for a major development in Great Britain are not met to date," the Paris-based company said in a statement. | "After in-depth discussions, EDF considers that the conditions for a major development in Great Britain are not met to date," the Paris-based company said in a statement. |
| The announcement came shortly before the firm was due to release its half-year earnings. | The announcement came shortly before the firm was due to release its half-year earnings. |
| British Energy, which generates about 20% of the UK's electricity, is part-owned by the British government which wants to sell its stake. | British Energy, which generates about 20% of the UK's electricity, is part-owned by the British government which wants to sell its stake. |
| The firm was privatised in 1996 but ended up being bailed out in 2002 by the government after running into severe financial difficulties. | The firm was privatised in 1996 but ended up being bailed out in 2002 by the government after running into severe financial difficulties. |
| Centrica was negotiating with EDF to be its minority partner in the acquisition, and was expected to pay around £3bn for a 25% stake. | Centrica was negotiating with EDF to be its minority partner in the acquisition, and was expected to pay around £3bn for a 25% stake. |
| 'Interest high' | 'Interest high' |
| British Energy's sites are considered prime locations for the government's proposed new generation of nuclear power plants. | British Energy's sites are considered prime locations for the government's proposed new generation of nuclear power plants. |
| EDF has other options for developing nuclear facilities in the UK, having bought land adjacent to two existing nuclear plants. | EDF has other options for developing nuclear facilities in the UK, having bought land adjacent to two existing nuclear plants. |
| A spokesman for the Department for Business, Enterprise & Regulatory Reform said: "Our commitment to nuclear power is clear. | A spokesman for the Department for Business, Enterprise & Regulatory Reform said: "Our commitment to nuclear power is clear. |
| "The go ahead for new nuclear power, alongside our action to promote energy saving and renewables is in Britain's long term national interest. | "The go ahead for new nuclear power, alongside our action to promote energy saving and renewables is in Britain's long term national interest. |
| "The level of interest in nuclear new build remains high and recent months have shown there are strong signals of an appetite for this from the market." | "The level of interest in nuclear new build remains high and recent months have shown there are strong signals of an appetite for this from the market." |