Private equity buyers warm up to Urenco

This weekend, various British newspapers were reporting that Urenco, Britain’s state-owned nuclear fuel giant, has finally come to the attention of the private equity community, despite the government’s willingness to consider selling this asset for the past 15 months or so.
The few remaining state-owned assets that Britain has have been on and off the auction block since the country’s debt crisis really hit home in 2008, with successive Labour and Conservative governments willing to consider selling the family silver in order to reduce the country’s deficit. Recent high profile and controversial disposals have included the Tote, sold to Betfred, and the sale of Northern Rock to Virgin Money.

As you would expect with a company that has a total value believed to be in the region of GBP 10 billion, the private equity names being linked as possible interested parties are some of the most powerful and high profile in the world. Buyout houses such as Apax, KKR, Carlyle and CVC are rumoured to be studying a possible bid, but given that Urenco is a three-way owned company between the British government and the German utilities companies E.ON and RWE, the UK would only stand to make a third from a possible sale, and any deal may prove complex to structure should E.ON or RWE be reluctant to sell their stakes.

Given the continuing rise in prices faced by the British public in their energy bills, and recent government posturing about trying to force energy companies to provide competitive and affordable prices, wouldn’t we be better off trying to keep our energy companies in the hands of British owners, where we may have some marginal influence on what they do with our energy?