EDF adds to its UK nuclear options

EDF adds to its UK nuclear options

By Ed Crooks and Rebecca Bream in London

Published: May 8 2008 23:39 | Last updated: May 8 2008 23:39

EDF, Europe’s biggest power company, has been buying land around nuclear sites in England and Wales.

The move puts the company in a position to build new power stations in the UK even if it fails to buy British Energy, the nuclear generator.

Friday is the official deadline for bids for the UK government’s 35 per cent stake in British Energy, and EDF, as well as RWE of Germany, is expected to make an offer. EDF and RWE refused to comment. Buying the stake would automatically trigger a bid for the entire company.

British Energy is in a unique position to benefit from the proposed nuclear renaissance in the UK, because it controls most of the country’s nuclear reactor sites, which is where any new atomic power stations will be built.

However, the Financial Times has learnt that while EDF has been working on its bid it has also been quietly buying farmland close to two nuclear sites: Wylfa on the island of Anglesey in north Wales, which is owned by the government’s Nuclear Decommissioning Authority; and Hinkley Point in southern England, owned by the NDA and British Energy.

Its purchases have not yet been made public, and are likely to raise concerns locally about the possible expansion of the nuclear sites. EDF has not yet begun what would be a long process of applying for permission to build reactors on the land it has bought.

However, the land deals create a viable if not complete alternative to buying British Energy. People close to the deal said that Friday’s deadline for bids, set by Rothschilds, British Energy’s adviser, could slip if the company received disappointing levels of interest. It is likely that the details of the bids, including price and the involvement of other companies, will only become clear in the coming weeks.

One person close to the sale process admitted on Thursday that British Energy was not expecting offers as high as the current share price, which closed yesterday at 715p, and that closer to 700p was more realistic.