By Lars Paulsson and Nicholas Comfort
Oct. 31 (Bloomberg) -- Centrica Plc, Britain's largest energy supplier, plans to raise 2.2 billion pounds ($3.55 billion) in a rights issue to fund the potential acquisition of a 25 percent stake in British Energy Group Plc.
Centrica will sell new shares at 160 pence each on the basis of three new shares for every eight held, the Windsor, England-based company said today in a statement.
``While we see markets as challenging, the company is approaching this from a position of strength,'' Finance Director Nick Luff said today during a conference call with reporters. ``All our major shareholders are on board.''
Centrica, which has about 16 million U.K. electricity and gas customer accounts, is seeking production assets to reduce its exposure to energy-market price swings, shielding customers from market volatility and providing more predictable earnings.
The company said last month it was in talks with Electricite de France SA on acquiring a 25 percent stake in the holding company set up to buy British Energy, following the nuclear company's 12.5 billion-pound takeover by EDF.
Centrica fell as much as 9.6 percent to 276.75 pence in London. The shares traded down 25 pence at 281.25 pence as of 8:10 a.m. local time.
The company will also seek opportunities other than British Energy. Recent declines in stock valuations had resulted in ``several opportunities in the U.K. or close to these shores which are quite enticing,'' Luff said.
The rights offer is fully underwritten by Goldman Sachs International, Credit Suisse Securities (Europe) Ltd., and UBS AG as joint bookrunners. HSBC Holdings Plc, BNP Paribas SA, RBS Hoare Govett and Barclays Capital are the lead managers.
Centrica said in a separate statment its business performance is ``in line with expectations.'' Full-year earnings will benefit from a lower tax rate because of a one-time deferred tax credit.
To contact the reporter on this story: Lars Paulsson in Geneva via lpaulsson@bloomberg.net
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