EDF Won't Pay `Any Price' for British Energy Deal

By Paul Dobson and Mathew Carr

Sept. 16 (Bloomberg) -- Electricite de France SA, Europe's biggest power producer, won't pay an inflated amount for British Energy Group Plc, the French utility's chief executive officer said.

EDF isn't going to do a deal ``at any price,'' Pierre Gadonneix told reporters today at a conference in London.

British Energy, the U.K.'s largest electricity generator, with eight nuclear power plants and one coal-fed station, rejected a 12 billion-pound ($23.8 billion) takeover offer from EDF on Aug. 1, although both parties pledged further talks. The U.K. company wouldn't support the offer because its largest private shareholders said the price was too low, two people with knowledge of the bid said at that time.

Electricite de France is ``clearly committed to play a major role in nuclear development in Great Britain,'' Gadonneix said. ``We are interested in developing our generation capacity for EDF Energy,'' its U.K. subsidiary.

The U.K. government wants to boost the share of electricity from nuclear power stations to reduce future dependence on imported gas and cut emissions. Paris-based Electricite de France is the dominant utility in France, where 77 percent of electricity is generated by nuclear power.

The Times reported that British Energy's board, led by Chairman Adrian Montague, will meet today to discuss a new, provisional bid from Electricite de France higher than the original offer.

Future Profits

The improved proposal may include a slightly increased cash offer of about 775 pence a share and a boost in the possible payout from contingent value rights, which are financial instruments designed to give shareholders a slice of future profits, the newspaper said.

Andrew Dowler, a spokesman for British Energy, which is based in East Kilbride, Scotland, declined to comment when reached by Bloomberg News.

British Energy shares fell 12.5 pence, or 1.7 percent, to 718.5 pence at 12:49 p.m. in London trading. Electricite de France shares fell 49 cents, or 1 percent, to 47.75 euros in Paris.

EDF has a scheduled board meeting tomorrow, spokesman Francois Molho said, declining to give details of the agenda.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net