MorganEnergy

Various rumors continue to leak out regarding the on-off sale of British Energy. Energy Business Review claims that Centrica is still trying to find a partner to boost its offer for the nuclear generator. More recently the Financial Times reported that Centrica is considering adding a £4bn cash component to its merger offer. British Energy shareholders, including the UK government, are believed to prefer cash to shares.

However, the FT also notes that EdF continues to be the preferred buyer for Mr. Brown and his government. Even the normally fiercely patriotic Daily Telegraph is prepared to accept a sale to the French on the grounds that the only viable alternative would be importing more energy from countries such as Russia and Algeria.

Unfortunately for Mr. Brown, EdF seems unwilling to buy at the price he, and other major BE shareholders, appear to want. And the more desperate the British become, the more likely it is that EdF will stick to its guns and refuse to spend more than it wants. After all, as the International Herald Tribune points out, there are plenty of other options for investment around the world. Interest in nuclear generation is booming in many parts of the globe. Britain might be conveniently just across the water, and also home to a large EdF-owned retail business, but the USA, China and South Africa are all promising investment targets. The IHT also notes that EdF does not want to become dependent wholly on nuclear generation. The company needs peaking plant as well, and the recent merger of Gaz de France with Suez is a major threat to EdF’s gas-related business.

All in all, it doesn’t look like there will be any movement on the British Energy sale any time soon, which probably means that a new deal will be announced tomorrow.