READING last week’s papers you might have thought that British Energy, the UK’s nuclear power company, would be in the hands of a new owner in a matter of days.

It won’t. While the battle to buy British Energy began a while ago – in the middle of winter, in fact – it still has a long way to run. The company has a tangled history, one in which the government has played a large role. Unravelling it, and putting down sound foundations for a new generation of nuclear power plants in Britain, will take time.

As we report in British Energy sale is eased by clean-up vow, the government is readying the ground for a sale by preparing to transfer its guarantee to pay for the decommissioning and clean-up of the current reactors to any new owner. This might appear a formality, but it is a crucial step. No utility group, even one with the deep pockets of Germany’s RWE or France’s EDF, will take on those historic liabilities, which may run into tens of billions of pounds.

Next comes the tricky issue of competition in the power market. EDF and RWE are the frontrunners, but both already have a substantial presence in Britain. Taking on British Energy would take them past a 25% share of electricity generation, and probably trigger a full European competition investigation, which might take more than six months. With ministers eager to crack on with new nuclear stations as soon as possible, this is an unwelcome development.

Centrica, the owner of British Gas, would like to think it has the answer. It isn’t big in power generation, and it already buys power from British Energy. If it were to team up with one of the foreign utilities, you could end up with a dream ticket – a European solution tinged with the colours of the Union Jack.

Talent factory

SHAREHOLDERS in DSG, the company behind Currys and PC World, are having a tough time. A second profit warning in three months sent the shares down 10% to close at 58¼p last week. The company’s stock-market value of £1 billion is now one third what it was a year ago.

Electrical retailing has always been a tough game, but now, with cutthroat competition across the high streets and from the internet, it is positively ferocious.

Little wonder it makes such a good training ground for executives. It won’t be much comfort to investors, but the company has become a production line of top talent for British business.

Ian Livingston, who vaulted into the top seat at BT last week, learnt his trade at DSG. So did John Pluthero, joint managing director of Cable & Wireless, and Jeremy Darroch, boss of BSkyB.

In retail, there is a similar list. Kate Swann at WH Smith is a DSG alumnus, as is Terry Duddy at Home Retail Group (parent of Argos), not to mention Euan Sutherland at B&Q.

All of the above owe much to Lord (Stanley) Kalms, who has spent his entire working life at DSG, which was founded by his father.

In this sense, running a business is a bit like managing a football team. When one boss has a long, secure tenure, like Sir Alex Feguson at Manchester United, or Arsene Wenger at Arsenal, young talent can flourish.

Fast track recovery

JACQUES GOUNON, the Eurotunnel boss, is working on a cunning plan to deal with the few thousand Britons who still have the right to use the Channel Tunnel for £1. For a long time these travel perks were the one good thing about being a shareholder. Thanks to the debts run up during construction, Eurotunnel has for most of its 22-year life been a financial basket case.

Not any more. Last week the ebullient Gounon was in town to boast about Eurotunnel’s first proper profits. The company is now in decent shape, thanks to the controversial debt restructuring he pushed through last year.

At one stage he planned to wipe out the Britons’ travel rights, but the threat of court action stopped him. The end result was a convoluted corporate structure, with one arm of the company being maintained simply to hold this class of shareholder.

Gounon wants to collapse this structure, but first he has to come up with a way of preserving the perks. He vows he doesn’t want to take them away – they make up only 2,000 return trips a year – but he does want corporate simplicity. It will test the lawyers, though there should be a proposal by the end of the year.

Eurotunnel’s return to financial health gives Gounon another problem – what to do with all the money the company should be making in a few years’ time.

According to internal forecasts, by 2010 there should be free cash of €250m (£200m) a year which, when added to the existing cash reserves of about €300m, gives it a sizeable war chest.

An obvious target is the high-speed railway that links the tunnel to London. The government will soon be looking for a new owner for the line when it breaks up London & Continental Railways (LCR), the consortium that built it. Eurotunnel could step in. This might serve a double purpose for ministers, as the tunnel group’s operation of a British rail line might keep Network Rail on its toes.

Unfortunately, the break-up of LCR is likely to come too soon for Eurotunnel. So this leaves the question of what Gounon might buy. What odds a Eurotunnel bid for a British toll road, say, or a logistics company? And given Gounon’s views on how valuable his company will become, could Eurotunnel fall prey to a bid itself?

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