Discussions between Centrica and Electricité d...
Centrica PLC
Today, Lake Acquisitions Limited ('Lake Acquisitions'), a subsidiary of EDF,
announced a recommended offer for the entire issued share capital of British
Energy.
Centrica and EDF are in discussions in relation to an option for Centrica to
acquire a 25 per cent interest in Lake Acquisitions following the completion by
Lake Acquisitions of its acquisition of British Energy. The acquisition by
Centrica would be at the same implied price per share as EDF pays for British
Energy, subject to certain costs to be agreed.
EDF would retain control of British Energy through its 75 per cent interest in
Lake Acquisitions and be responsible for running all British Energy's power
stations. Centrica's 25 per cent interest in Lake Acquisitions would give
Centrica the right to offtake at least 25 per cent of the uncontracted output of
British Energy's existing generation fleet. Profits of Lake Acquisitions would
be distributed to EDF and Centrica in proportion to their equity interests.
Centrica would also be entitled to participate in EDF's nuclear new build
activities in the UK on a 75/25 (EDF/Centrica) basis, with EDF leading the
developments and being responsible for the building and operation of the new
nuclear power stations.
The above terms are reflected in a non-legally binding Memorandum of
Understanding.
The proposed transaction would significantly address Centrica's key strategic
objective of increasing its vertical integration, thereby reducing its exposure
to volatile wholesale gas and electricity prices.
Centrica would expect to fund the acquisition of its stake in British Energy
through a combination of debt and equity, with the objective of maintaining
credit ratings in the A range. Completion of any acquisition by Centrica would
be subject to the fulfilment of certain conditions precedent, including
regulatory approvals.
There can be no certainty that Centrica will reach agreement with EDF on the
arrangements described above. A further announcement will be made in due course.
Goldman Sachs International and Credit Suisse are acting as financial advisers
to Centrica.
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Enquiries:
Centrica Investor Relations +44 (0) 1753 494900
Centrica Media Relations +44 (0) 1753 494101
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Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1 per cent. or more of any class of
'relevant securities' of Centrica or British Energy all 'dealings' in any
'relevant securities' of that company (including by means of an option in
respect of, or a derivative referenced to, any such 'relevant securities') must
be publicly disclosed by no later than 3.30 pm (London time) on the London
business day following the date of the relevant transaction. This requirement
will continue until the date on which any offer becomes, or is declared,
unconditional as to acceptances (or, if implemented by a scheme of arrangement,
such scheme becomes effective), lapses or is otherwise withdrawn or on which the
'offer period' otherwise ends. If two or more persons act together pursuant to
an agreement or understanding, whether formal or informal, to acquire an
'interest' in 'relevant securities' of Centrica or British Energy, they will be
deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant
securities' of British Energy by Centrica or of Centrica by British Energy, or
by any of their respective 'associates', must be disclosed by no later than
12.00 noon (London time) on the London business day following the date of the
relevant transaction. A disclosure table, giving details of the companies in
whose 'relevant securities' 'dealings' should be disclosed, and the number of
such securities in issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.
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