Wednesday, December 15, 2010

Atomic Energy Canada Limited up for late grabs

News circulated on November 15th that an entrepreneur by the name of Andrew Day was seeking to put together a late bid for AECL in the government's privatization process. It appears he has now done so: "EXCLUSIVE: Entrepreneur mounts 11th-hour bid for AECL's Candu reactor unit."

Day (and unknown investors) wants to buy the part of AECL that builds new reactors because, being an entrepreneur, he sees potential in other markets for the Candu business to grow. China and India are named as the most likely markets. The other reported bidders for AECL to date, leaked out in a Globe report on November 10th, just 5 days before Day's initial interest became public, are Bruce Power and SNC-Lavalin. Both are reportedly only interested in the reactor maintenance business, i.e., the servicing of existing Candu reactors, of which there are 32, with 20 in Canada. The union is asking how this could work, the separating out of different parts of AECL, namely the Candu building part and the maintenance/refurbishing part.

So it's worth asking just what kind of bidding process the government is running here, when latecomers might ride in, after hearing leaks about the extent of the offers that are supposedly on the table and outside the parameters of whatever the initial formal bid rules were. Seems like a shoddy process that isn't going to get best value for these assets, it's looking like more of a fire-sale. Maybe the leaked news of SNC-Lavalin and Bruce Power's limited interest in AECL was in fact designed to spawn additional offers such as Day's. Just speculation but given that it's all being done under wraps, other than these leaks and occasional news reports, that's all we can do.