£1,000 lowest stake for generators sale

The minimum investment in the sale of government shares in National Power and PowerGen will be about £1,000, spread over three financial years.

It will also emerge today that the price to the UK public for the first instalment will be 170p for each National Power share and 185p for each share in PowerGen.

The minimum investment figure is higher than in the previous sale of shares in the generators in 1991 and than in the final sale of shares in BT in 1993. At today's launch of the pathfinder prospectus, the Government will disclose that private investors must buy at least 200 shares if they wish to participate in the £4bn sale.

The UK public will buy shares in a package of three National Power shares to two PowerGen, though the partly-paid shares will trade separately.

Private investors will pay less than institutions but the level of discount will not be made clear until the institutional first instalment is announced on 16 February. The Government has already said that extra "incentive" discounts will be given to allUK private investors who register and buy their shares through an approved share shop.

The incentive discount of 25p a share on the institutional price, will be divided into 10p on the second instalment and 15p on the third. The aim is to encourage people to hold on to their shares. The pathfinder will reveal the dividends which the companies are expected to pay this year.

It will also warn of the regulatory threat facing the companies, and the implications of increased competition in the marketplace. The pathfinder has already been delayed for a week because of a threat by the regulator, Offer, that there may be an inquiry into wholesale electricity prices later this year and that a reference to the Monopolies and Mergers Commission cannot be ruled out.

Professor Stephen Littlechild, director-general of Offer, has repeatedly made clear that he is concerned about the powerful position which National Power and PowerGen hold and their ability to influence prices in the electricity trading pool.

Separately, it has emerged that some Conservative MPs are pushing for Trafalgar House's £1.2bn bid for Northern Electric to be referred to the Monopolies Commission.

Three MPs are also understood to have written to the 11 other regional electricity companies, asking for their support in having the hostile bid referred.

However, the management of at least one regional firm, Eastern Electric, has said that there are no grounds for an MMC reference and that the electricity companies must be treated like any other private sector firm.

Michael Heseltine, President of the Board of Trade, has now received advice from the Office of Fair Trading and is considering whether the bid should be referred.

David Morris, chairman of Northern Electric, said his board would not rule out accepting a bid from Trafalgar if it was "at a very much higher level". On BBC2's Money Programme, he said the main criterion for acceptance was shareholder value.

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