Outlook: British Energy
Thursday 12 November 1998
More nuclear stations remain the long-term banker. But the new management team under Peter Hollins has decided that it is time to diversify into the wider energy market. So he has tabled a pounds 2bn bid for London Electricity and is also toying with the idea of forking out another pounds 1bn for a pair of coal-fired stations from either PowerGen or National Power.
With zero debt and a market capitalisation of pounds 4bn - more than double its value at flotation - BE could comfortably fund both acquisitions. There is the small matter of financing its ongoing nuclear liabilities, but what better stream of income to tap than London's monopoly distribution business?
So an offer for London looks logical, even if the other shortlisted bidder, France's state-owned EDF, is using taxpayers' money to drive the auction up to fancy prices. However, by attempting to acquire some coal-fired stations as well, BE may find its enthusiasm to diversify backfiring painfully. The Government might be prepared to allow BE to swallow London, overlooking the fact that it also controls 21 per cent of the generating market.
But by buying a couple of coal-fired stations too, BE would make itself a price-setter, in which case it could find itself in the position of PowerGen and have to sell assets in order to integrate vertically.
Mr Hollins would be better to settle for one or the other, or he might find himself missing out on both. Since he won't see another nuclear station built during his working life, even if the politicians do eventually bow to the environmental argument, that would be an ominous start to his career in BE.
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 Florida couple forced to register as sex offenders for having sex on public beach
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Italian police 'reveal' what Jesus looked like as a young boy
Florida couple forced to register as sex offenders for having sex on public beach
Mysterious 'X-Files' sounds heard miles above the Earth
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian with near-naked ensemble
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...