Centrica contemplate British Energy merger

Centrica, the current owners of British Gas, contemplated a merger bid with British Energy, however, the merger could be threatened by a potential European-based cash bidder.

Of course this will only occur if EDF abandon current plans for a takeover bid for the British nuclear power generator.

EDF last week came the closest so far to agreeing a deal, although the verdict was no deal due to M&G and Invesco, who are both investors in the nuclear generator as well as Centrica, agreeing that the 765p per share bid price was far below expectations, forcing a rethink.

Centrica is said to be taking a nice 25% share of the British Energy firm if the EDF bid goes through, and has been keen to be a part of the UK new build nuclear plants.

Taking the above into account it’s understandable that the merger plans have been put to one side, as it does not have the capital for a cash offer.

Of course the problem is, what is an acceptable offer?

765p is almost definitely not enough, due to the recent offer decline, but suggestions have been raised that a £8 per share offer may be acceptable, far from the current 765p.