American engineering major Fluor Corp has confirmed that it has submitted an offer for the UK nuclear decommissioning company British Nuclear Group (BNG) to British Nuclear Fuels Ltd (BNFL).
The offer, understood to be £250-£400 million ($475 - $760 million) to acquire BNG in its entirety, apparently recognises that BNG as a whole is “worth far more than its individual parts.”
However, observers suggest the offer is well short of the £500 million ($950 million) estimated value of the company.
Fluor is expected to hold further discussions with BNFL, the UK government and BNG stakeholders such as the Nuclear Decommissioning Authority (NDA) and the Department of Trade and Industry on its offer in the coming weeks.
The direct approach to the government by Flour follows a recent decision by the BNFL board to break up the company ahead of the sale. BNFL concluded that the best value would be delivered if its Project Services business and its one third shareholding in AWE, a military contractor, were sold separately from the nuclear decommissioning businesses which deliver the Sellafield and Reactor Sites contracts awarded by the NDA.
BNFL is now planning to begin consultation with government on the sale of Project Services and the AWE shareholding, with the aim of starting the separate sales processes as soon as possible.
However, concerns that the break up may delay the sale until 2008 and open the possibility of a rival bid from Bechtel, which has been excluded from bidding until then, are understood to have prompted the Flour action. Senior Flour managers are also concerned that a break up of the company would destroy value, damaging the brand and prompting staff with key skills to leave.
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