Centrica, the owner of British Gas, is proposing a cash offer in its bid for British energy to counter government objection, which has 35% stake in the nuclear group. Centrica aims to buy more electricity and upstream gas business to minimise its dependence on the volatile energy markets.

Further to recent speculation, Centrica confirmed it is indeed in discussions with a third party for taking a minority ownership in British Energy, subject to several conditions, comprising this third party acquiring British Energy successfully and receipt of regulatory clearances.

If the third party does not proceed with an offer, or the firm’s discussions with them do not end in an agreement, Centrica might well consider a number of other alternatives regarding British Energy stake.
Centrica has no background of nuclear power generation. Centrica has insufficient cash, but its debts are relatively much lesser and it would be in a position to make an offer of cash and share for the British Energy. It would tap some of its shareholders, who are also investors in British energy, over the bid issue.

EDF’s £12bn cash bid was earlier rejected by British Energy’s largest shareholders Invesco and M&G terming 765p a share offer as very low.

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