Speculation that EDF Energy is set to takeover British Energy mounted this month as the two companies conceded that they were still in negotiations on a deal. As PUK went to press on September 23, a deal was reported to be imminent. Negotiations have continued thoughout the summer after the two firms came close to signing a deal (see PUK 174) some weeks ago. However, the deal fell through at the last minute after concerns by two of BE's main shareholders - Invesco and M&G - that, at 765p a share - it undervalued BE. EDF's previous offer had included an alternative of 700p in cash plus contingent value rights - financial instruments tied to the future performance of BE's power stations. If power prices rise or BE's output goes up, BE's new owner would make more money from the CVRs.
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