EUROPE'S biggest coal-fired power station yesterday turned down a £1.9bn takeover proposal and pressed ahead with plans for a stock market listing.
North Yorkshire-based Drax rejected the indicative offer from a consortium including US power giant Constellation Energy on the grounds that it was too low.
Talks with advisers to the consortium took place over the last week, while Drax also sounded out its own shareholders over a deal.
It was convinced that there was no certainty that the consortium would be able to deliver on the proposal, which came with a string of conditions such as due diligence and involved paying back a sizeable chunk of Drax's £900m-plus debt.
In a statement, Drax said the indicative offer was below the combined value of its debt and equity as measured by current trading of its bonds.
Drax, which employs around 560 staff in the UK at its site near Selby, burns 36,000 tonnes of coal every day and is a major customer for mines across the UK. The group went into administration a couple of years ago when US power giant TXU collapsed. It is still owned by creditors and is preparing to list on the stock market during December.
However, Drax said it was prepared to listen to other offers.
"If the board receives any other indicative proposals, it will also assess them on similar bases of value, deliverability and timeliness," Drax said.
The statement was issued against a background of mounting interest in energy suppliers, with Powergen owner E.On considering a takeover offer for Scottish Power.
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