UK rejects $750m bid for BNG from US engineering giant Fluor

Publish date: September 12, 2006

The British government has rejected a £400m ($750m) bid for clean-up company British Nuclear Group Ltd. (BNG) from US engineering and construction firm Fluor Corp, the British newspaper the Independent reported this weekend.

BNG’s parent company, BNFL, will now have less influence over how its decommissioning businesses are sold, the newspaper said in an unsourced report.

The Government is understood to have told state-owned BNFL – the holding company that controls BNG – and the Nuclear Decommissioning Authority (NDA) to formally approve a new sale process for BNG. BNFL and the NDA, which owns the UK’s nuclear sites, had been supposed to run the process by themselves, the newspaper said.

Fluor made the unsolicited offer for BNG last month and was even in talks with UK services company Amec last week about making a joint bid.

But the Independent reported that officials from the Treasury and the Department of Trade and Industry (DTI) have decided that BNFL would not be allowed to sell the entire subsidiary to Fluor. Fluor made its offer to buy the entirety of BNFL despite a decision by BNFL last month that it would sell BNG piecemeal, the paper reported.

But Fluor has said that its offer recognized, received last month, that BNG as a whole is worth far more than its individual parts, Reuters reported.

BNG operates the huge Sellafield site in Cumbria and does decommissioning work there. It also owns the UK’s ageing Magnox nuclear-reactor sites and has a project services business that carries out other decommissioning work.

The NDA will now issue contracts for the Magnox and Sellafield sites in a bid competition. Once the new sale process has been formally approved by ministers and the NDA and BNFL, the decommissioning authority will hold an industry day for companies interested in bidding, according to the paper.

According to the Independent, the NDA is in charge of putting the estimated £70bn worth of future clean-up contracts out to tender in competitive auctions.