Centrica pressured to drop nuclear electricity deal
Published on : 23/02/2009
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Centrica has come under increasing pressure to drop its plan to buy a 25 per cent stake in British Energy.
The deal, which is worth an estimated £3.1 billion, is being opposed by EDF following the collapse of wholesale energy prices, which it claims has destroyed the economic viability of the proposed transaction.
Sam Laidlaw, Centrica's chief executive, has been trying to tempt potential investors into supporting the buyout, reports the Times.
According to the news provider, Laidlaw is pursuing the deal because Centrica lacks its own electricity generation capability and is forced to buy energy on the wholesale market.
However, the paper states that many institutional shareholders and analysts think the £2.2 billion that Centrica has already raised through a share rights issue could be better spent by buying up distressed gas producers whose value has fallen recently in line with wholesale prices.
Last month, Centrica reached an agreement with Hess Limited to acquire a 67 per cent stake in York gas fields in the southern North Sea.
