THE French utility giant EDF was this weekend close to securing the shareholder support it needs to seal a £12 billion takeover of British Energy, the UK’s only nuclear power generator.

The French group has improved the terms of a bid that was rejected at the end of July by two large shareholders. It is now hopeful of winning the backing of fund manager Invesco, one of the two rebels, which controls 15% of BE.

Together with the British government’s share - it has already publicly backed EDF - the French could then count on about 47% of BE’s shares voting in favour of the plan, probably sufficient for the BE board to recommend acceptance.

The other rebel, M&G, the fund-management arm of Prudential that holds 7%, is still pushing for a merger with Britain’s Centrica.

In July, EDF offered 765p for each BE share, valuing the whole company at about £12 billion. Shareholders could choose to take the cash, or 700p plus a “contingent value right” (CVR) - in essence, a slice of the company’s future profits. Invesco and M&G said no.

It is understood that EDF is now considering a small increase in the cash price and, crucially, a change to the terms of the CVR that would make it more valuable. This is thought to involve changing the assumptions made on BE’s likely power output and the price it will receive for its electricity.

Some sources close to the talks hope the deal will finally be brought to a conclusion within a fortnight. John Hutton, the business secretary, told The Sunday Times he was “impatient” for it to happen.

Meanwhile, M&G has done its own analysis on a combination of Centrica and BE. It found that synergies of £4 billion to £6 billion could be extracted from a merger. That would lead to BE shares being worth about 925p, according to M&G’s sums.

The assumptions are based on Centrica offering five of its own shares for two British Energy shares. Although no such offer is imminent, some City sources believe it was never given serious consideration due to the government’s preference for a cash offer and a partnership with EDF.

M&G also believes the enlarged group’s improved balance between customer power demand and generating capacity could lead to better customer service, which would be worth £1 billion to £2 billion.

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