SHAREHOLDERS in British Energy have broken their silence on last week’s failed £12 billion takeover of the nuclear-power generator by Electricité de France (EDF), saying they rejected the deal because it was too complicated and unworkable.

Sources close to the key shareholders, Invesco and M&G, said they would have been unable to accept the sweetener offered as part of the deal — a complicated security called a “CVR” (contingent value right) which gives a slice of future profits. The security was offered alongside 700p-a- share in cash, as an alternative to a straightforward takeover offer priced at 765p a share. BE shares closed last week at 700p.

The institutions would have found it difficult to take the sweetener as they normally hold only ordinary shares, not derivatives or bonds. The unusual structure of the deal was revealed by The Sunday Times last weekend.

Sources close to the talks said they hoped to revive the takeover later in the year.

“We all still want it to happen,” one said. The revelation of the spat over the terms is likely to heap pressure on BE, EDF and their advisers.

Invesco and M&G together control 22% of BE’s shares. Even before the sweetener row, they had indicated to BE chairman Sir Adrian Montague that they would be reluctant sellers.

The institutions, which voiced their concerns independently, believe wholesale power prices will soar, making BE ever more valuable.

It is understood that the shareholders were unclear on the exact structure of the security and how to value it. The “CVR” was explained to the two institutions for the first time on Wednesday, two days before the takeover was to be announced. They considered the straight cash offer too low.

Last night sources close to the government and BE expressed frustration. “They were offered a chance to share in the future profits, with the payout dependent on electricity prices and BE’s output. They are the most bullish people on both, so why not take it?” said a source.

EDF is accelerating plans to build at least one new nuclear reactor on land it owns near the Hinkley Point power plant in Somerset.

The government is pressing ahead with the sale of Nuclear Decommissioning Authority (NDA) sites. The Wylfa site in Anglesey has the capacity to house two or three new nuclear plants, and work could begin soon.

The NDA will commence a formal auction of all its sites before the end of the year, according to industry sources.

Centrica last night played down reports it was working on a £22 billion all-share offer for BE. The energy giant was rumoured to be poised to sound out its investors on their appetite for a deal. A source close to the energy giant said: “We remain interested in BE, but we need to see what happens with EDF.”

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