Centrica shares fall as takeover speculation dims
Tuesday 18 February 1997
Uncertainty over the group's long-term future took hold of the markets, which marked Centrica shares down 10.25p to 65.25p compared with Friday's closing price on the unofficial "grey market". Shares in BG, the renamed core of British Gas which runs the pipeline network and offshore exploration operations, edged up 2.5p to 174.5p.
The price had risen sharply on the grey market last week on speculation that Centrica would be a takeover target for one of the big oil companies seeking a route into the UK gas business. However analysts pointed to the many drawbacks which are likely to dog Centrica, including management's prediction that it will not pay a dividend "for the foreseeable future". Demerger documents show Centrica lost a notional pounds 486m in the nine months to the end of last September after exceptional charges of pounds 457m.
Simon Champion, a gas analyst with Charterhouse Tilney, said: "We don't see it as a takeover target because we can't see who would want to buy it. It isn't attractive to income funds, unlike British Gas, because it won't pay a dividend. All that makes the business very hard to value."
The company is still negotiating to lessen its pounds 30bn "take-or-pay" burden from contracts to buy gas it no longer needs at inflated prices. City experts have estimated it will cost pounds 1bn for Centrica to buy its way out of these liabilities.
Under the split, 1.7 million British Gas shareholders, including many "Sids" who have held the stock since privatisation in 1986, received one Centrica share for every share they held.
- 1 Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
- 2 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 4 World learns of app that shows you who unfriended you on Facebook, app promptly crashes
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
Greece debt crisis: Angela Merkel and Francois Hollande issue Athens with 24-hour ultimatum to avoid crashing out of the euro
Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...