A dramatic last-minute hitch to plans for France’s EDF to buy British Energy leaves managements, shareholders and especially the British government in a quandary.
It was a 12 billion pounds ($24 billion) deal that was supposed to relaunch Britain’s nuclear energy programme. Everyone had been told to expect it. In fact, the collapse of talks came too late for French newspapers, several of which had been briefed on the deal and splashed it prominently on their front pages on Friday.
In end, however, big insitutional investors persuaded British Energy to reject EDF’s offer as low-ball, despite the best endeavours of the British government, with a 35-percent stake.
So what happens next? Talks are continuing and British business minister John Hutton says he remains convinced an EDF takeover makes sense; yet the gulf between the EDF and British Energy boards on price is clearly substantial. British Energy says there can be no certainty of any deal.
It is yet another headache to spoil Prime Minister Gordon Brown’s summer holiday, as his popularity slumps to a record low .