Americans snap up further 3.2% of Sweb
Wednesday 02 August 1995
SEI's pounds 9a-share offer for Sweb, valuing the company at pounds 1bn, was launched on 13 July after a dawn raid in which the US group bought 11.2 per cent of the shares, also at pounds 9 a share.
Investors are thought to have sold yesterday on continued speculation that this or any other bid in the sector might be referred to the Monopolies and Mergers Commission.
In a document issued yesterday, Professor Stephen Littlechild the industry regulator, warned that mergers and acquisitions could have implications for competition, protection of consumers and his ability to regulate. He is consulting on Sweb and two other bids in the sector: a pounds 1bn hostile takeover attempt by Scottish Power for Manweb and an agreed pounds 2.5bn offer by Hanson for Eastern Electricity, announced on Monday.
Sweb's share price fell 6p to close last night at 899p while Manweb's was down 7p at 868p. Eastern Electricity shares edged down a penny to 908p.
Professor Littlechild said that, in relation to the Hanson bid, "in my view additional measures would be necessary to provide continued protection to customers and to maintain regulatory effectiveness". He has asked for comments from interested parties by 11 August.
The Hanson takeover of Eastern is conditional on the bid not being referred by the Government to the MMC and on "indications" from Professor Littlechild that he will not impose unwanted licence changes on Eastern or "seek undertakings" from the company.
The regulator had called for an earlier bid for Northern Electric by Trafalgar House to be referred to the MMC but was subsequently overruled by Michael Heseltine, then President of the Board of Trade.
On Monday, Professor Littlechild said he would look for "binding undertakings" from the group that he would be given all the information he needed to regulate the core electricity businesses effectively.
He also said he wanted guarantees of ring-fencing of the core business and separate accounting, as well as assurances that adequate resources would be made available to the supply and distribution arms.
In a separate development, small investors in Manweb hit out against the attack by Scottish Power, voting against changes in the company's articles that limit any shareholder from holding more than 15 per cent of the company.
The "inconclusive" show of hands at the annual meeting forced management into a poll, but the change was carried by the millions of proxy votes held by the board.
John Roberts, Manweb's chief executive, said the company did not need to hide behind a15 per cent limit to fend off the pounds 9.15-a-share bid. But he viewed the rebellion as a "tremendous" show of support.
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