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Business News

'British Energy and Centrica must merge'

Invesco, the biggest single shareholder in the UK nuclear group British Energy, has called for the company to be merged with Centrica, which it says is the only solution for the long-term future of both the companies.

The investment group that has 15 per cent of British Energy, as well as 5 per cent of the owners of British Gas, Centrica, says that the proposals have been put to the boards of both companies. The plans, which also include a role for the French energy group EDF, are designed to help the companies to come "together [so] that they can work with EDF to build nuclear sites," say Invesco.

Invesco's insistence that the deal involves the French energy group comes just days after EDF's bid for the nuclear group was rebuffed. Earlier this month, EDF's planned takeover of British Energy, which was valued at 765p a share and was backed by the Government, was rejected by Invesco and by M&G, British Energy's second biggest institutional shareholder. It is understood that the shareholders were looking for a figure closer to 900p a share for their stakes.

Centrica is reported to be sanguine about merging with British Energy. Centrica has also stated that it would consider a minority stake in British Energy should a third party buy it. Both Centrica and British Energy declined to return calls.