Nuclear operator British Energy has agreed to be taken over by French utility EDF for around 12.4 billion pounds ($24.61 billion), a source briefed on the matter said on Friday.
The source told Reuters EDF had agreed terms of the offer of about 775 pence per share with British Energy after months of talks, and hoped to finalize the deal on Tuesday or Wednesday of next week.
BE shares were off 0.4 percent at 725.5 pence at 0940 GMT, valuing the company at around 11.7 billion pounds ($23.22 billion).
The 775 pence price would value British Energy at 12.4 billion pounds -- including a 35 percent stake owned by the British government.
EDF shares were up 2.5 percent.
Centrica declined to comment.
British Energy and EDF were not immediately available for comment on Friday.
However, on Thursday British Energy confirmed it was in "advanced discussions with one party" but said there was no certainty the discussions would lead to an offer being made.
Valuing British Energy has proven difficult due to the impact of a surge in power prices, which has led British Energy and its shareholders to hold out for a higher price.
However, a recent fall in prices may have encouraged the company to secure an agreement.
EDF is also looking to agree a deal with British Gas-owner Centrica for the UK firm to take a minority stake in British Energy, although the terms have yet to be decided -- causing a delay in the formal announcement, the source said.
A separate industry source said talks between EDF and Centrica were continuing.
The involvement of Centrica is seen as crucial to winning over the support of the British Government, which is reluctant to see the nuclear giant falling entirely into overseas hands.
Once a deal is agreed with EDF the offer will be put to shareholders including the government, who would then be asked to recommend the price.
However, the deal would immediately raise competition issues due to EDF's presence in the UK wholesale and retail gas supply markets.
British Energy has attracted takeover interest since Britain gave the green light to new nuclear power stations in January.
The company owns eight power stations, all of which have surrounding land suitable for new building.
It first said it was in talks in March, but an initial string of interested suitors was reduced to one by June.
Industry sources said Centrica had offered an all-share deal, which was rejected due to an absence of cash.
A takeover of British Energy would net over 4 billion pounds for government coffers, although the cash has been earmarked to help clean up after Britain's closing nuclear power stations.