Centrica In Talks To Buy 25% shr In Lake Acquisitions
Wednesday September 24th, 2008 / 7h45
Edited Press Release LONDON -(Dow Jones)- Centrica said Wednesday that it and EDF are in discussions in relation to an option for Centrica to acquire a 25% interest in Lake Acquisitions following the completion by Lake Acquisitions of its acquisition of British Energy. The acquisition by Centrica would be at the same implied price per share as EDF pays for British Energy, subject to certain costs to be agreed. Under the deal EDF would retain control of British Energy through its 75% interest in Lake Acquisitions and be responsible for running all British Energy's power stations. Centrica's 25% interest in Lake Acquisitions would give Centrica the right to offtake at least 25% of the uncontracted output of British Energy's existing generation fleet. Profits of Lake Acquisitions would be distributed to EDF and Centrica in proportion to their equity interests. Centrica would also be entitled to participate in EDF's nuclear new build activities in the U.K. on a 75/25 (EDF/Centrica) basis, with EDF leading the developments and being responsible for the building and operation of the new nuclear power stations. The terms are reflected in a non-legally binding Memorandum of Understanding, Centrica said. The proposed transaction would significantly address Centrica's key strategic objective of increasing its vertical integration, thereby reducing its exposure to volatile wholesale gas and electricity prices. Centrica would expect to fund the acquisition of its stake in British Energy through a combination of debt and equity, with the objective of maintaining credit ratings in the A range. Completion of any acquisition by Centrica would be subject to the fulfilment of certain conditions precedent, including regulatory approvals. There can be no certainty that Centrica will reach agreement with EDF on the arrangements described above. Goldman Sachs International and Credit Suisse are acting as financial advisers to Centrica. Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=PJeHmS4lRrSS53ZpCwJJZg%3D%3D. You can use this link on the day this article is published and the following day.
