RWE in 'offer for British Energy'

British Energy has been hit by mounting costs

German utility RWE has made an £11bn takeover approach for the UK's nuclear operator, British Energy, reports say.

The proposed cash offer of almost 700p per share, would value the UK government's 35% stake in the firm at £4bn, the reports said.

RWE is one of several firms said to be interested in buying British Energy.

British Energy, struggling with plant closures and mounting costs, needs backing to develop new nuclear power stations and clean up reactor sites.

British Energy declined to comment on the reports.

The newspaper reports said that RWE made the offer several weeks ago and was now conducting due diligence on British Energy's books.

British Energy confirmed on March 17 that it was in talks that could lead to a takeover.

Weekend newspaper reports had said British Gas parent Centrica had been approached by both RWE and France's EDF about possible joint bids.

Opposition

The government has expressed its commitment to a new generation of nuclear plants in an attempt to tackle climate change.

But it has faced opposition over the possibility that the firm could end up in foreign hands, leading to job losses in the UK.

British Energy profits fell 4% for the nine months to the end of December as costs, including those related to limiting its impact on the environment, increased.

The company had to shut down four reactors at the end of 2007 after problems with boiler closure units.