The planned flotation on the London Stock Exchange of Drax, the company that runs the coal-fired power station of the same name, has been thrown into doubt following the issuing of a near-GBP2 billion purchase offer by an American consortium.
According to reports, US power company Constellation Energy and Perry Capital, a US hedge fund, have tabled a bid of GBP1.9 billion for the Yorkshire, UK-based power station operator Drax.
The move throws doubt over the company’s current plan to issue shares on the London Stock Exchange by the end of this year. However, according to the Financial Times Drax is considering this approach while also continuing its preparation to float.
Drax power station is an attractive target for buyers because the size of market it commands and due to the current high electricity prices in Europe. Drax is also likely to be open to the possibility of a takeover as it still needs to clear considerable debts stemming from its 2002 collapse following the bankruptcy of its largest customer TXU Europe.
Drax is a 4,000 megawatt power station in Yorkshire can generate up to 7% of the UK’s electricity needs.