Spanish utility giant Iberdrola yesterday indicated it would not table a bid for nuclear energy company British Energy unless the likely buying price falls.
The company, which completed its takeover of ScottishPower last year, said it was determined to play a role in the expansion of the UK's nuclear energy industry being promoted by the government.
However, it said the bid prices of around 700p a share being discussed for the energy company, which has been linked with companies including Germany's RWE, French company EDF and Britain's Centrica, were too high.
Iberdrola strategy chief Jose Luis del Valle said: "I do not think we would look at those prices that are being discussed."
Currently, the race for British Energy, in which the continental firms look to be frontrunners, seems to be centring around bids of about £11bn. This appears to be the main obstacle to an Iberdrola bid.
Del Valle said Iberdrola had not yet had access to British Energy's books but that a bid for the firm "is something we have discussed with British Energy and with the government, and that it makes sense for us".
Company chairman Ignacio Galan said: "We are already in the UK and we are obliged as a responsible corporation to analyse each and every one of the opportunities that creeps up in the market."
Del Valle, who is also chief executive of ScottishPower, added that "the future of British nuclear energy is something we are interested in". In particular, he believes entering the UK nuclear energy market would enable the company to combine the expertise of its Iberdrola and ScottishPower businesses.
However, he maintained that any offer for the company, which is 35%-owned by the government, would only be made if it made economic sense and boosted Iberdrola's position in the market.
The government wants the private sector to develop a new nuclear power stations. These will almost certainly be located near existing plants.
But Iberdrola indicated that it could be satisfied with sites bought from the Nuclear Decommissioning Authority (NDA) and other sellers, and was relaxed about British Energy falling into the hands of a rival.
Del Valle said: "Even if someone else buys British Energy, there may be sites that become available from the NDA and other authorities. There will be other opportunities for investment in nuclear aside from British Energy."
The NDA, which owns 18 sites, including two with operational reactors, said last month its assets were now up for sale.
Del Valle indicated that the company would be prepared to develop new nuclear power stations in conjunction with a rival, noting that it already had wholly-owned and part-owned nuclear plants in Spain.
"There are other opportunities in the UK in nuclear besides buying British Energy," he said.
The firm also indicated it was keen to further develop its presence in alternative energy in the UK. ScottishPower is already the biggest wind producer in the country. Del Valle praised government moves to boost sectors such as wave energy. "It is sending signals for further investment in the UK."
ScottishPower generated around a quarter of 2007 earnings at Iberdrola, more than £1bn, despite only contributing for eight months of the year.
The firm's major revenues still come from Spain, although it also has a strong presence in Latin America and is on the verge of completion a deal to buy US company, Energy East.
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