France's Areva Group and Japan's Toshiba Corp. are considering bids for nuclear fuel producer Urenco, but British, German and Dutch authorities disagree over what to do with the ultra-secret firm, industry sources said.
Britain is keen to sell its 33-per cent stake, and German utilities RWE AG and E.ON AG are talking to potential buyers over their combined 33 per cent, but the Dutch government is not considering a sale.
Analysts estimate that the Buckinghamshire, U.K.-based uranium enrichment firm is worth €2.5-billion to €3.6-billion ($3.3-billion to $4.8-billion), but some of the sellers are hoping for as much as €12-billion.
Both Areva and Toshiba, which owns U.S. reactor vendor Westinghouse Electric Co. LLC, declined to comment.
Any transaction would require an agreement between the three governments due to the firm's unique corporate structure. It was set up by the 1971 Treaty of Almelo, which governs technology transfers and the company's ownership.
An industry source close to the situation said that there has been a lot of discussion among Urenco shareholders, but given their different motivations and the complications of the treaty, it is very well possible that nothing will happen this year.
A spokesman for the U.K.'s Department for Business, Innovation and Skills said on Monday that Britain was considering a sale of its Urenco stake and that the government was discussing its options with Urenco's other shareholders but that no formal position had been taken yet.
He declined to comment on indications of interest the government had received from any bidders.
A spokeswoman for the Dutch ministry for economic affairs said that German utilities RWE and E.ON are seeking to sell their Urenco stakes and are talking to potential buyers but added that the Dutch government is not considering a sale of its 33-per-cent stake.
E.ON and RWE declined to comment.
Despite the apparent disagreement between shareholders, several sources said there was already strong interest in Urenco.
Urenco, which had 2011 sales of €1.3-billion and net income of €359-million, is the second-largest of four major nuclear fuel producers, behind Russia's Tenex but ahead of U.S. firm USEC Inc. and Areva, according to World Nuclear Association data.
French nuclear reactor builder Areva is keen to buy into Urenco and has appointed Nomura Securities Co. Ltd. to advise it, an industry source close to the deal said.
The source said that Areva had expressed an interest but not yet made a bid or any substantive approach, given that the process has not formally opened.
Areva already has a joint venture with Urenco and uses its uranium centrifuge technology at its new Georges Besse II plant in Tricastin, southern France. The French company has closed an older plant, which used the gaseous diffusion technology to enrich uranium and which previously supplied a quarter of the world's reactors with fuel.
A stake in Urenco would give Areva greater control over the centrifuge technology and wider market access.
Toshiba is also weighing a bid for Urenco, according to the Sunday Times.
A stake in Urenco would have a powerful logic for Toshiba, and could push it to pay top dollar, sector specialists said.
Unlike Areva, which is a one-stop shop for reactors, nuclear fuel and waste recycling services, Westinghouse focuses mainly on reactors, and that weakens its hand in public tenders, in which provision of fuel is an advantage.
"Westinghouse absolutely wants to be able to provide services across the entire nuclear cycle," a French nuclear industry veteran said.
A financial markets source close to the discussions said that private equity houses KKR and CVC were also interested in striking a deal for Urenco.