U.K.-based nuclear operator British Energy PLC's (BGY.LN) board is going to meet soon to study a "potential" sweetened takeover offer from French state-controlled electricity giant Electricite de France (1024251.FR), a source familiar with the matter told Dow Jones Newswires Monday.
British Energy's board is expected to issue a recommendation at the end of its meeting, the source added.
"If the recommendation is positive, if British Energy's board favors the preliminary new offer, than EDF's board which meets Wednesday in Paris will validate the new offer," the source explained.
EDF's initial offer for British Energy was dual: EDF planned to offer shareholders either 765 pence a share or 700 pence plus contingent value rights per share.
EDF 's potential new offer would sweeten the contingent value rights component of its mixed alternative without changing the 700 pence part, the source said, without elaborating.
EDF could also sweeten its all-cash alternative by five to ten pence, the source said.
The French government, which owns 84.8% of EDF, was reluctant to let the utility increase its cash offer, but has recently changed its mind as "if this is what is needed to make the deal, then that's what's needed," the source explained.
The 5 to 10 pence also represent the depreciation of the pound compared to the euro since EDF's initial offer.
" EDF's sweetened offer is to take into account the discussions that took part between EDF and investment fund Invesco," the source said.
Invesco Asset Management Ltd., one of British Energy's largest shareholders, rejected EDF's initial offer in July on the grounds it undervalued the company.
The rejection made EDF drop its bid then.