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| British Energy rejects takeover | British Energy rejects takeover |
| (10 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. |
| 'Embarrassment' | 'Embarrassment' |
| The BBC's Business Editor Robert Peston says 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. | The BBC's Business Editor Robert Peston says 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. |
| 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 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." |