Grid still in dark over sale of shares

The National Grid failed yesterday in its bid to clarify the intentions of James Capel, the HSBC-owned broker that became the electricity transmission company's largest shareholder with the acquisition on Tuesday of Hanson's 12.5 per cent stake.

It also remained in the dark over the intentions of Suliman Olayan, the Saudi billionaire understood to be underwriting the acquisition of the shares.

A spokesman for the Grid said it had sent out demands for information, known as 212 notices, to James Capel and Hanson on Tuesday. The return of those notices yesterday confirmed that Capel was the beneficial owner of a 12.2 per cent stake in the Grid.

Capel would not elaborate on its statement on Tuesday that it had entered into a "structured transaction" with a subsidiary of the Olayan Group to hedge the risk of holding the shares. A spokesman for Olayan Europe in London also refused to add anything to the Capel statement.

Further information about the Saudi businessman emerged yesterday. Awarded the KBE in 1987 by the Queen, he has also been honoured by King Carlos of Spain and King Carl Gustaf of Sweden.

His 49-year-old company operates more than 30 businesses and financial enterprises in the Middle East and around the world.

The National Grid said yesterday it had issued a further 212 notice to the Olayan Group and expected to hear from the company today. It is also trying to contact the company to clarify its position.

John Uttley, finance director, said: "We always welcome long-term shareholders - wherever they may be. It's always nice not to have all your eggs in one basket. I don't think, in itself, it gives rise to concern."

Meanwhile Hanson reiterated the fact that as far as it was concerned it had sold the stake and retained no interest. Christopher Collins, vice- chairman, described as pure coincidence the appointment of Niven Duncan, a former chairman-designate of Eastern Group, Hanson's electricity distribution subsidiary, as a consultant to the Olayan Group.

He confirmed that Hanson retained no economic interest in the Grid shares and denied speculation that the company had struck any so-called contracts for difference with James Capel, which would allow it to participate in any uplift in the value of the shares without actually owning them.

As the owner of a regional electricity company, Hanson is prohibited from owning more than 1 per cent of the shares. Thanks to the terms of a government golden share all other shareholders are restricted to 15 per cent stakes, limiting the prospect that any Olayan holding might be the prelude to further corporate activity.