BZW cleared of bid charges

Takeover Panel says adviser did not take inducements to buy Northern Electric shares

The Takeover Panel has cleared BZW of allegations of irregularities which surfaced during the final stages of CalEnergy's pounds 782m bid for Northern Electric which BZW advises.

The Panel has accepted that payments made to BZW in connection with its performance as adviser was entirely unconnected with the purchases of Northern shares in the latter part of the bid

In the early hours of yesterday morning the Panel took the unusual step of extending CalEnergy's offer from its official Friday close to Christmas Eve.

This followed an investigation into the purchase of Northern shares by BZW a move which helped the regional electricity escape CalEnergy's clutches when the shares were counted at lunchtime on Friday.

That count showed that CalEnergy owned or had acceptances for 49.77% of Northern's equity leaving it just 300,000 shares short of victory.

The Panel then threw the outcome of the bid into chaos when it launched an investigation into BZW's share buying based on "new information" it had received. That new information was provided by BZW and related to the payment of pounds 250,000 of fees by Northern in relation to the work BZW had carried out during its last defence of the electricity company which had been withheld.

After BZW had been given initial clearance by the Panel for its purchases of Northern shares on 18 December the Panel asked for confirmation that there would be no change to the flat fee structure.

This was the first time that BZW had come across any mention of fee structure. When it returned to the Panel to clarify the fee arrangements and point out that there was a performance related element which was unconnected with its market activities the Panel regarded this as new information.

It is understood that the Panel found nothing irregular in the fee arrangements and concluded that there was no breach of the Takeover Code. It is also understood to have concluded that the new information would not have altered the Panel's endorsement of BZW's purchase of Northern shares last week.

A BZW spokesman said: "There was no breach of the code, there were no irregularities."

However, even though the Panel thought the new information had no bearing on the conduct of the bid it still extended the bid deadline paving the way for CalEnergy to amass the additional votes to secure victory.

One market source said: "One of the problems for the Panel appears to be that with the voting so close it was in a position where its ruling on what had already happened could affect the outcome of the bid."

With such a small number of acceptances required it is expected CalEnergy will be able to declare victory when the bid finally closes at 1pm on Tuesday.

In any bid there are always a few shares which are held up in the post a problem which could be compounded by the weight of the Christmas mail.

CalEnergy will also be allowed to secure new acceptances although Northern's advisers have been barred from any further market activity.

All acceptances received after the original Friday deadline will have to be approved by the Panel before they can be counted in the final tally.

Neither CalEnergy nor Northern would comment on the ruling yesterday. The Panel was also unavailable for comment.

Northern and its advisers must now consider whether they will appeal against the ruling which could ultimately lead to the original wishes of shareholders being overturned.

The acrimonious and controversial end to the bid was in stark contrast to the well mannered conduct of the hostile bid. Both sides have resisted the temptation to sling mud during a battle which has centred always on the real value of Northern.

The two sides had failed to reach an agreed deal because Northern's board always insisted that the offer would need to at least 700p.

CalEnergy's original 630p offer was later raised to 650p. Some institutional investors took the unusual stand of making public their opposition to a bid at that level saying it still did not reflect the company's true value.

PROMOTED VIDEO
News
video
Life and Style
tech
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Research Analyst - Recruitment Resourcer

£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

Senior Analyst - Financial Modelling

competitive: Progressive Recruitment: This really is a fantastic chance to joi...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform