International Power and the Japanese firm Mitsui have announced their withdrawal from the race to purchase the UK's largest power plant, Drax.
Drax has already rejected three approaches from other parties, all believed to value the plant operator at around GBP2 billion. Reports suggest the firm plans to press ahead with its proposed stock market flotation.
Commenting on its pull-out, International Power said it had not been able to formulate a firm offer which it believes would satisfy the expectations of the Drax board. Accordingly, no offer has been submitted. International Power and Mitsui had been working with Drax since October with a view to mounting a bid.
The Drax group operates the eponymous power station, located near Selby in northern England. The 4,000MW station supplies some 7% of the UK’s electricity needs and is Europe’s largest coal fired power plant. The station’s owning group consists of a consortium of banks that stepped in to save the station after previous owner AES – a US utility – withdrew financial support following a collapse in UK power prices. Under its current owners however Drax’s financial state has recovered, thanks mainly to the soaring price of wholesale energy, driven by high oil prices.