10 million targeted in power sell-off

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The Independent Online
Advisers to the Government will write to 10 million households this week and launch a heavyweight advertising campaign urging people to buy its shares in the two electricity generators, National Power and PowerGen.

The Government hopes to make around £4bn from the sale of its remaining 40 per cent holding in the two generators, of which at least £1.6bn is expected to come from small investors, who are expected to be offered discounts or other incentives. The 625,00

0 existing shareholders will also be given priority if applications have to be scaled back because of excess demand.

According to one source close to the share offer, the minimum investment will be set higher than in privatisations such as British Telecom or British Gas. It will be at least £300 for the first instalment and a total of about £1,000 for all three instalments in the staged offer.

The Government, jointly advised by Barclays de Zoete Wedd and Kleinwort Benson, has decided to scrap the traditional share information office, and is relying solely on "share shops" - retail outlets run by the high street banks, building societies and some stockbrokers.

Serious small investors - those wanting to invest £10,000 or more - will have the option to join in the international tender offer, the simultaneous offer to institutional investors.

As in 1991, when the first 60 per cent of generators were sold, members of the public will be offered a package of both shares. They will not be allowed to buy shares in just one generator.

Between about £8m and £10m is understood to have been earmarked for advertising the issue. The advertising agency WCRS has devised a campaign featuring examples of natural power such as volcanoes and waves.

It has steered clear of jokes and celebrities. There will be no Sid, the figure used to market British Gas shares.

After the launch on Tuesday, the aim is to publish the pathfinder prospectus at the end of this month. The offer will begin in the second half of February, and share allocations will be made at the end of February or beginning of March.

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