Advisers would net pounds 30m from PacifiCorp's bid for Energy Group

Click to follow
Financial advisers in London and New York would net almost pounds 30m from the takeover bid for Energy Group by PacifiCorp of the US, according to the offer document posted to shareholders over the weekend.

It shows that if the deal goes through Goldman Sachs, the US investment bank which is advising PacifiCorp, will receive $13.3m (pounds 8.3m) for the work, plus "reasonable out of pocket expenses".

PacifiCorp also confirmed that it had so far spent a combined total of $60m on bank fees, legal expenses and other costs in its attempts to acquire the UK power group, which owns Eastern Electricity, the UK's largest regional power supplier.

The offer document also reveals that PacifiCorp lost $65m (pounds 41m) on the foreign exchange markets after its original offer for Energy Group lapsed last summer.

The US group had entered into foreign exchange contracts worth pounds 1.45bn to hedge against changes in the dollar exchange rate.

Energy Group's financial adviser, Lazard's has already received pounds 2.5m and will gain a further pounds 5.8m if the PacifiCorp bid is successful, according to the document. In addition Energy Group said it had so far paid its other advisers, Morgan Stanley, some pounds 3.4m for work on the previous bid and would pay the bankers another pounds 7.6m for the new deal.

PacifiCorp last week launched a raised pounds 4.06bn offer for Energy Group, but could face two other rival bidders in the shape of Texas Utilities, the Dallas power supplier and Nomura, the Japanese Investment Bank. Both potential predators are still in discussions with Energy Group management but have yet to pounce formally.

PacifiCorp last year offered pounds 3.6bn for the UK business, but the bid lapsed when the deal was referred to the Monopolies and Mergers Commission. The US utility was cleared to come back with a new bid last December.

The PacifiCorp offer document shows that Derek Bonham, Energy Group's executive chairman, will emerge with pounds 1.38m from shares in Energy Group if the bid goes through, based on Friday's closing share price of 779p.

Comments