Uranium Processor Edges Closer To £10bn Sale
The uranium processing group jointly owned by the British, Dutch and German governments is inching towards a £10bn sale after directors picked advisers to steer them through one of Europe's biggest-ever privatisations.
Sky News has learnt that the board of Urenco, which is headquartered in Buckinghamshire, is close to appointing Rothschild, the investment bank, to help steer it through a potentially-contentious deal.
The impending appointment comes ahead of discussions between the three shareholders in Urenco over the options for reducing their stakes in the company.
An initial public offering (IPO) through a stock market flotation has not been ruled out, but Whitehall sources said that the Dutch government was less keen on the move than on an outright sale to a major player in the energy industry.
The Hague's resistance is said to stem in part from its experience with ABN Amro, the Dutch banker which was listed on the stock market and eventually broken up and sold to a consortium led by Royal Bank of Scotland in a disastrous takeover in 2007.
However, Urenco's technology and assets are so sensitive that its current owners will impose strict safeguards on any future shareholders.
Michael Fallon, the energy minister, said earlier this year that any sale "will make sure we deliver value for money and protect the UK's security and non-proliferation interests".
A sale of Urenco would potentially represent one of the biggest takeover deals in Europe so far this decade, although security concerns mean that the field of bidders is likely to be heavily restricted.
It could raise in the region of £3bn for the Treasury, rivalling the expected eventual proceeds from the flotation of Royal Mail, which is due to take place next week.
Urenco's activities are governed by the Treaties of Almelo, Cardiff and Washington, which were drawn up in an attempt to control the proliferation of nuclear technology and stop enriched uranium from falling into the hands of terrorists.
Tepco, the Japanese energy group, was seen as an obvious buyer of Urenco until the devastating earthquake and tsunami in 2011 triggered a crisis at the Fukushima reactor in 2011.
Cameco, a Canadian uranium producer, Mitsubishi of Japan and Areva, the French nuclear group, are among those expected to bid.
Several private equity groups, including Apax Partners, Carlyle and KKR, are also assessing whether to participate in an auction.
A number of investment banks have already won roles on the deal, with Morgan Stanley, the Wall Street firm, advising UK Government ministers.
The two German utilities backed by Berlin, EON and RWE, are being advised by Bank of America Merrill Lynch, while ABN Amro is now understood to be working with the Dutch government.