French bid 'is best for BE'

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The Independent Online

British Energy (BE) will not get a better offer than French rival EDF's £12bn for a decade, Whitehall sources have claimed.

The Government, which has a 35.5 per cent stake in BE, wants it to accept the 765p-a-share offer. The Government hopes that EDF will use its nuclear expertise to build reactors with BE as part of its power station roll-out plan.

But leading shareholders Invesco and M&G scuppered a deal last month, saying that the offer should be higher due to rising energy prices. Neil Woodford, Invesco's head of investment, has since gone public suggesting that a merger with Centrica would be a better deal. However, sources said that many of BE's assets were likely to degrade in the coming years, and Mr Woodford was accused of "short-termism".

Business Secretary John Hutton has said that the BE/EDF deal was still possible within a fortnight, but it is thought unlikely.