When Drax left the UK national state company National Power in 1999 it was sold for £1.9bn to AES. At this time forward power prices were at £35/MWh those in the industry knew that prices were going to fall but some reports had a growing price due to a slight increase in demand and past government planning. In reality this was a foolish way of looking at the market and when Drax got itself into difficulty after TXU defaulted on a PPA for coal swap, prices were at £15/MWh and forward prices were not looking healthy. Drax was valued at around £0.5bn. As prices have increased and forward prices continue to rise with carbon causing some healthy returns for Drax, buying this leviathan, may look like a good deal. All stations have a limited life but ironically the gift of carbon permits has possibly kept the life of this station going a bit longer. Furthermore, planning for new power stations will get tighter inevitably building on an old site will be the only option. There appears to be more upside for Drax than there was in 1999 and Constellations bid looks low as a result. The potential floatation on AIM will be interesting as many funds will look invest in Drax through this medium and the value could be significantly over the current bid.