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A Done Deal At Last

Posted in Nuclear,UK by Cheryl Morgan on the September 24th, 2008

It appears that the EdF buyout of British Energy has finally happened, though much of what has happened remains somewhat murky.

As the BBC reports, there is now an expectation that Centrica will take some sort of stake in the nuclear generator. It seems likely that this will be in the form of an off-take deal for 25% of the output of the plants, plus 25% ownership of any new plants that are built.

Then there is the deal itself. The basic offer is for 774p per share, which is well up on original suggestions of 700p, but well short of the 1000p that BE initially said it was worth. However, there is an alternative deal on offer of 700p plus a “Contingent Value Rights” note (CVR). Yes, it is a derivative. EdF is asking BE shareholders to take a punt on the future value of UK energy prices. As the Telegraph points out, this is something of an uncertain deal.

Finally, it looks like EdF may not be the sole nuclear generator in the UK. It will definitely be building new plants at Hinkley Point and Sizewell but, as this Guardian report reveals, it will be selling some of the brownfield sites:

The company, which is 85% owned by the French government, has also agreed that it will sell off British Energy land at Bradwell, Essex, and more at either Heysham, Lancashire, or Dungeness, Kent, to rivals who are also interested in constructing and operating a new generation of nuclear stations.

So other companies may well decide to get in on the nuclear bandwagon. Indeed, RWE has already announced its intention to do so.

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