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15 April 2008 – Vattenfall, Sweden's state-owned utility, is said to be interested in joining the race for British Energy and has appointed investment bank Citigroup to look into the benefits of a possible bid, according to yesterday's Telegraph.
If Vattenfall does decide to table a bid it will be competing with other European energy giants such as EDF of France and Germany's RWE. Currently, British Energy is being valued at £11bn ($21.7bn)
The intense interest in British Energy from across Europe underlines the desire for consolidation among the continent's leading utility firms.
RWE, one of two German companies looking at British Energy, has tabled an indicative offer worth slightly under £0.70, while EDF Energy, which is among those with an extensive presence in Britain's residential energy market, has also outlined an initial proposal.
Centrica, the owner of British Gas, is holding talks with EDF and RWE about participating in an offer for British Energy, with the Telegraph reporting sources close to Centrica saying that it was more likely to pursue a formal bid in conjunction with EDF
According to the Telegraph, the level of competition in the process may drive the price tag of British Energy to levels that are likely to serve as a deterrent to some bidders.
Although Centrica is obviously keen to be involved in the future of British Energy, it could do so through "offtake" agreements, which would guarantee it the supply of energy, rather than through a formal bid.
Vattenfall's interest in British Energy is not the first time the group has been linked with British energy companies.
In 2005, it appointed McKinsey, the consulting firm, and NM Rothschild, the investment bank, to evaluate takeover opportunities across the sector, and was linked to bids for Centrica and Scottish & Southern Energy.
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