French power giant EDF is today expected to table a takeover offer for British Energy (BE) in a move that the UK Government hopes will kick-start development of a new generation of nuclear power stations.
 
EDF and its advisers, led by Merrill Lynch, were said last night to be finalising details of an all-cash bid pitched between £9.2bn and £10.2bn.

The Government, which owns 35pc of BE, hoped to maximise value through a takeover battle. But there were doubts yesterday that other interested parties, including Spain's Iberdrola and Germany's RWE, were intending to place bids. Bankers NM Rothschild, BE's advisers, set a deadline of today for the next round of preliminary offers.

BE owns eight ageing reactors on sites that are likely to be used as locations to build one or more new nuclear power stations. EDF, which runs France's nuclear industry, was always considered front runner to buy BE because of its expertise and financial firepower. RWE, after considering a solo offer, then talked to Centrica, owner of British Gas, about a consortium bid. But a source said yesterday: "This idea is pretty much dead."

At Iberdrola, an adviser last night dismissed reports that it was about to make an offer.

"We don't rule out getting involved in the future, but I doubt there will be any offer from us tomorrow."

Rothschild has told Dresdner Kleinwort, Iberdrola's advisers, and Deutsche Bank, working for RWE, that it would still consider offers after today's deadline.

A Government adviser said yesterday: "It is possible that other bidders might wait to see what EDF does before they enter the race - at least, that's what we'll be hoping if EDF ends up being the only offer on the table after today." But one analyst said that Iberdrola will be happy to see EDF buy BE. "If EDF is tied up in Britain with BE, it will not have time to take on Iberdrola in Spain, its backyard."

When it was first disclosed this year that BE was for sale, there was talk of the company fetching up to £14bn - generating around £5bn for the UK taxpayer. Centrica is desperate to join a consortium bid, to give the company an alternative source of energy and reduce its dependence on gas.