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1 May 2008 - The £9bn ($18bn) auction of British Energy has taken a knock after Sweden's Vattenfall pulled out of the bidding and RWE of Germany signalled that it will not overpay for the company which owns most of the UK's nuclear sites.
The UK's Daily Telegraph reports that Vattenfall was set to team up with RWE to make a bid for BE but has been told by the Swedish government, which contains the anti-nuclear Centre Party, not to proceed.
RWE remains in the chase but its chief executive, Juergen Grossmann, said this week that Germany's second-biggest utility - which owns npower in the UK - did not want a bidding war.
Meanwhile, the other main bidder, France's EDF, is understood to have told shareholders it plans to maintain "price discipline". Last week, EDF was tipped as planning an £8.80-a-share bid, valuing BE, including the government's 35 per cent stake, at £14bn. Insiders have said that price is too high.
Centrica, the owner of British Gas, is keen to be involved in the bid and favours teaming up with EDF.
Some analysts believe the Government will not get more than about £7 a share for its stake. RWE and EDF are thought to have told the Government some of the assets are of a poor quality.
BE owns eight nuclear reactors, including some of the likely sites for nuclear new build. Bidders are to submit offers by May 9.
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