Music When The Lights Go Out: British Energy rejects EDF takeover
The expected takeover of energy provider British Energy by the French giants EDF took somewhat of a tumble last night when the two companies failed to negotiate a fair price. The practical question is: So when are the lights going to go out?
The deal would have secured the sale of most of Britain’s power stations (eight if we’re counting) and would have simplified the building of countless new ones. The government, being a 35% shareholder in British Energy, was believed to be behind the deal, seeing this as an avenue for their ‘greener’ energy targets. Hastily determining to downplay the collapse, a spokesperson for the government announced that this was “no disaster”; which is a relief because anymore calamities swarming around Westminster at the minute and it would look like carelessness.
No, it may not be a disaster, but it’s a little embarrassing no?
The proposed deal fell through because two of British Energy’s major investors, Invesco and the Prudential, thought that shares in the company were worth £10 each whereas EDF thought they were worth just £7.65.
Now, if I know what it’s like to be in such a colossally important meeting, and I believe I do, than I’m pretty sure the whole thing would have played out like an episode of Dragons’ Den. This is the inevitable part of the show when some deluded young upstart values their business at being worth £14 billion only to have the steely dragons (the French in this case, how fitting) laugh in their face and claim that their fledgling company is worth only a measly £12 billion.
So, another snag on the green agenda front for Brown and the Labour reds then.
But what does this mean for the energy-hungry populace then? Are we in line for some New York style blackouts? Because, though the British don’t often do looting particularly well (normally stuff like that’s consigned to the odd shipwreck in the Hebrides), I’m sure we could could make an exception in this case.
Well, actually, hang on a second, I wouldn’t start lighting those Molotov cocktails just yet, it turns out that this might not be such a terrible balls up after all.
Though this prospective deal had taken a lot of time and money to bring to the table, many have relinquished that this slip up might not so bad. Peter Luff of the business select committee for example, when speaking on the Today Programme, claimed that the nuclear development programme was “not dependent” on this deal and that in fact, though it would make the future expansion of nuclear energy more complicated, at least one company wouldn’t own such a lion’s share of the country’s power generating facilities. Other companies, to dangerously mix metaphors, are now free to return to the table and, evidently, still have their irons in the fire. Eon, for example, are a viable alternative to EDF and a deal here would mean that the concentration of power in the sector would not be quite so, well, pungent.
Even Brian Wilson (the former Energy Minister not the former Beach Boy), who resolutely claimed that the deal with EDF was just experiencing some set backs rather than being all out dead, relented that there would be no short term effects on us, the consumers. The real victim, it would seem, is the government. After ploughing such resource into this deal with the French only to have it then fall through makes Gordon Brown et al look like, well, a bunch of prize berks. Not that this is all their fault, naturally, but one can almost hear the Opposition clearing their throats, sharpening their knives and launching into stretched tirades about how No. 10 has managed to royally foul everything up… again.
Better batten down the hatches then Mr Brown, I think I can hear the theme from Jaws creeping up…
