Power major Drax, buyout group BCHP end takeover talks |
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Wed, 23 Nov 2005 12:50
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LONDON: Power station operator Drax Group Ltd said Wednesday its talks with U.S. consortium BCHP Group for a possible take over, have ended and BCHP Group, led by Constellation Energy Inc., has withdrawn its offer.
Consequently, Drax is preparing for a stock market flotation, the company said, adding it may happen by 15 December.
Besides Constellation Energy, the consortium included hedge fund Perry Capital and private equity investors Hellman & Friedman and the Blackstone Group.
Drax, announcing the cancellation of the talks in a statement, said a majority of its investors had opposed the takeover and wanted to go ahead with the listing on the London Stock Exchange.
Drax had been a target for takeover by at least two other consortiums -- a group including International Power Plc. and Japanese group Mitsui & Co, which withdrew its offer, and another including Texas Pacific Group Europe LLP.
BCHP Group is understood to have made an initial offer of 1.9 billion pounds for the company, against an expectation of 2.25 billion pounds by Drax's board. The consortium later revised the offer to 2.23 billion pounds, and was reported to be willing for an enhancement.
Drax operates Europe's biggest coal-fired power station near Selby in north Yorkshire, generating as much as 6 per cent of Britain's total power requirement. It is controlled by its creditors, after its U.S. owner AES Corporation refused to extend finances when it was about to collapse three years ago and the company went into administration. It had since recovered and made pretax profits in the nine months ended 30 September of 26.1 million pounds against a loss of 50.9 million pounds in the same period of 2004.
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US’s power major Constellation makes £1.9bn bid for Drax 