EDF-British Energy tie up falls through

EDF will no longer be the UK's main power provider, after its bid for British Energy was left in pieces yesterday.

EDF will no longer be the UK's main power provider, after its bid for British Energy was left in pieces yesterday.

Negotiations fell down at the eleventh hour after a painstaking series of discussions regarding the takeover that would have led to a £12 billion deal between the two companies.

The failure to reach a deal will come as a surprise to many of those in the industry, as until yesterday the tie up appeared to be all but signed for.

However, despite EDF offering two deals; 765p per share in cash, or 700p cash plus a performance-based contingent value rights component, the deal was rejected by British Energy.

Officials have not spoken about the failure to broker a deal but EDF did release a late statement, commenting that "after in-depth discussions, EDF considers that the conditions for a major development in Great Britain are not met to date".

However, one source close to the developments told the FT: "There was a last-minute hitch", suggesting the failure may have been a surprise even to those in the higher echelons of the energy industry.

There had also been criticism of the government for allowing the deal to go ahead, after some MPs claimed it would equate to 'handing our energy resources to the French government'.