Update: EDF pulls out of British Energy deal

Mon 4 Aug 2008
LONDON (ShareCast) - Shares in British Energy (LSE: BGY.L) dropped Friday after France's EDF (Paris: FR0010242511) pulled out of a potential £12bn deal to buy the UK nuclear group.

Just hours before a deal between the two companies was rumoured to be announced, EDF said that "after in depth discussions, it considers that the conditions for a major development in Great Britain are not met to date."

Two leading private shareholders in British Energy, thought to be Invesco and Prudential, have reportedly vetoed the deal as they were holding out for a higher price.

Britain's Business Secretary John Hutton told BBC Radio 4's Today programme that the government, which owns 35% of British Energy, was disappointed the deal had fallen through.

"I think it would have been a good fit. It's up to the board now and EDF to see if there is any way that this gap can be bridged," he said.

Earlier in the morning, British Energy had said "advanced discussions" with an unidentified party continued but without an agreement to date.

"There can be no certainty that the discussions will lead to an offer being made," it added.

Source:http://uk.biz.yahoo.com/080801/214/i46of.html