Centrica prepares cash offer for BE

British Gas owner Centrica has raised its bid for British Energy with the introduction of a cash offer, following a rejection by the government of its earlier bid.

British Gas owner Centrica has raised its bid for British Energy with the introduction of a cash offer, following a rejection by the government of its earlier bid.

Centrica is currently waiting to see id EDF Energy's bid goes through, as purchasing a minority stake in the company following EDF's takeover may be its only option.

However the company is also preparing its own bid in the meantime despite the government, a 35 per cent owner of the company, having made its objections to Centrica's ownership clear.

EDF and British Energy are resuming talks this week following the failure to agree a price for the company earlier this month.

In a surprise announcement, British Energy rejected EDF's offer this month of 765p per share as too low, as the company's biggest share holders Invesco and M&G ruled the offer out.

Having been turned down for an all-share merger of the company this year already, Centrica now looks to include around £4 billion of cash, in order to buy out the government's stake in the company.

With less debt than EDF, Centrica may have an advantage over the French energy company, but still faces an uphill battle.