24th Sep 2008 07:04
Today, Lake Acquisitions Limited ("Lake Acquisitions"), a subsidiary of EDF,announced a recommended offer for the entire issued share capital of BritishEnergy. Centrica and EDF are in discussions in relation to an option for Centrica toacquire a 25 per cent interest in Lake Acquisitions following the completion byLake Acquisitions of its acquisition of British Energy. The acquisition byCentrica would be at the same implied price per share as EDF pays for BritishEnergy, subject to certain costs to be agreed. EDF would retain control of British Energy through its 75 per cent interest inLake Acquisitions and be responsible for running all British Energy's powerstations. Centrica's 25 per cent interest in Lake Acquisitions would giveCentrica the right to offtake at least 25 per cent of the uncontracted output ofBritish Energy's existing generation fleet. Profits of Lake Acquisitions wouldbe distributed to EDF and Centrica in proportion to their equity interests. Centrica would also be entitled to participate in EDF's nuclear new buildactivities in the UK on a 75/25 (EDF/Centrica) basis, with EDF leading thedevelopments and being responsible for the building and operation of the newnuclear power stations. The above terms are reflected in a non-legally binding Memorandum ofUnderstanding. The proposed transaction would significantly address Centrica's key strategicobjective of increasing its vertical integration, thereby reducing its exposureto volatile wholesale gas and electricity prices. Centrica would expect to fund the acquisition of its stake in British Energythrough a combination of debt and equity, with the objective of maintainingcredit ratings in the A range. Completion of any acquisition by Centrica wouldbe subject to the fulfilment of certain conditions precedent, includingregulatory approvals. There can be no certainty that Centrica will reach agreement with EDF on thearrangements described above. A further announcement will be made in due course. Goldman Sachs International and Credit Suisse are acting as financial advisersto Centrica. \* TEnquiries:Centrica Investor Relations +44 (0) 1753 494900Centrica Media Relations +44 (0) 1753 494101\* T 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 inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 pm (London time) on the Londonbusiness day following the date of the relevant transaction. This requirementwill 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 toan agreement or understanding, whether formal or informal, to acquire an"interest" in "relevant securities" of Centrica or British Energy, they will bedeemed 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 "relevantsecurities" of British Energy by Centrica or of Centrica by British Energy, orby any of their respective "associates", must be disclosed by no later than12.00 noon (London time) on the London business day following the date of therelevant transaction. A disclosure table, giving details of the companies inwhose "relevant securities" "dealings" should be disclosed, and the number ofsuch securities in issue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. Copyright Business Wire 2008Related Shares:
Centrica