Drax turns down third £2bn offer
Europe’s largest coal-fired power plant Drax has rejected a £2bn bid from International Power and Japanese engineering company Mitsui.
Yorkshire-based Drax, which is running an auction for its sale at the same time as preparing an initial public offering, has also turned down similar bids from two American consortiums.
Drax, which supplies 7 per cent of the country’s electricity said all three bids undervalued the plant.
Last week private equity firms Apollo Management, Texas Pacific Group and TowerBrook Capital Partners made an approach worth £2.07bn.
It had already received an approach worth around £1.9bn from a group involving American power group Constellation Energy and Perry Capital, an American-based hedge fund.
Analysts say that Drax, which is owned by a consortium of banks, hopes the bidding war will eventually reach £2.5bn, nearly three times what the plant was estimated to be worth before electricity prices began their headlong rise, more than a year ago.
Drax will ask bidders to submit their final bids for the station by early November.