LONDON - British Energy Group PLC shares rose more than five per cent on Friday after the nation's biggest electricity producer disclosed several bidders had made preliminary offers to buy the company. It did not identify the bidders or the amounts.
The disclosures boosted speculation of a bidding war for British Energy, which has eight nuclear power stations and one coal-powered station.
The company, which is 36 per cent owned by the government, said it had received a "range of proposals from several parties," including proposals priced higher than Thursday's closing price of 680 pence (US$13.23). At that price, the company was worth about 10.9 billion pounds ($21.2 billion).
The stock closed up 5.2 per cent at 715.5 pence ($14) on Friday.
British Energy did not indicate whether the offers were in cash or shares, and cautioned there was no certainty of a firm offer being made.
"A further announcement will be made in due course," it said, adding that discussions with the preliminary bidders were likely to continue for "a number of weeks."
Electricite de France SA, Britain's Centrica PLC, Germany's RWE AG and Spain's Iberdrola SA have all been named by analysts as potential suitors.
Evolution Securities analyst Lakis Athanasiou said a bidding contest is looking more likely.
"Speculation that only EdF had made a bid, with some reports putting the bid as low as 650 pence ($12.65), was misleading and contributed to price weakness in recent days," he said. "We continue to believe that the likeliest outcome is a non-contested bid with a value of 750 pence ($14.60)."
EdF is considered the front runner because of its experience building and running nuclear power plants. The French company has already said it wants to build several new nuclear reactors in Britain, where it has a large subsidiary called EdF Energy.
British Energy was privatized in'96, but a government bailout was approved in 2005 after lower power prices led the company to report it faced insolvency.
The British government last year sold a 25 per cent stake, reducing its shareholding to the current level and using the 2.1 billion pound proceeds to help fund the decommissioning of the firm's existing power plants. Decommissioning dates range between 2014 and 2035.
The government earlier this year gave the go-ahead for a new generation of nuclear power stations to help meet Britain's power supply needs.
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