UK-based energy group Centrica and French electricity major EDF have announced that they are in discussions in relation to an option for Centrica to acquire a 25% interest in Lake Acquisitions, which is wholly owned by EDF. This follows the completion of Lake Acquisitions's takeover of British Energy.

The acquisition by Centrica would be at the same implied price per share as EDF pays for British Energy, subject to certain costs to be agreed. Lake Acquisitions has announced a recommended offer for the entire issued share capital of British Energy.

EDF would retain control of British Energy through its 75% interest in Lake Acquisitions and will be responsible for running all British Energy’s power stations.

Centrica’s 25% interest in Lake Acquisitions would give Centrica the right to offtake at least 25% of the uncontracted output of British Energy’s existing generation fleet. Profits of Lake Acquisitions would be distributed to EDF and Centrica in proportion to their equity interests.

Centrica would also be entitled to participate in EDF’s nuclear new build activities in the UK on a 75-25 (EDF/Centrica) basis, with EDF leading the developments and being responsible for the building and operation of the new nuclear power stations. The terms are reflected in a non-legally binding memorandum of understanding.