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Manweb confirms bid talks

Manweb, the Chester electricity company, yesterday confirmed that "substantive talks" were continuing with an overseas third party that may lead to a recommended cash offer.

As the company refused to confirm that the third party was PacifiCorp of Portland, Oregon, City views about whether a formal bid would emerge were mixed. The US utility is certain to be the third party, according to City sources, but there were concerns that after five days of talks the company had still not reached the stage of confirming its interest. A spokesman for PacifiCorp in Oregon said it was company policy not to discuss price-sensitive matters.

Manweb, fighting a pounds 1.13bn offer from Scottish Power, said in its response to the bidder's revised offer document that it would continue to "pursue vigorously a strategy of retaining its independence unless an offer is made at a level which the board believes fully reflects the underlying value".

Manweb said Scottish Power's revised offer still undervalued Manweb's shares. "It offers an inadequate control premium and is mean by comparison with other offers in the electricity sector," it said. John Roberts, Manweb's chief executive, said: "Manweb has an excellent future as an independent company."

Meanwhile, Scottish Hydro Electric said it aimed to "deliver real dividend growth" in the region of 6 per cent per year in the medium term.

In its response to a recent statement by Professor Stephen Littlechild, the electricity regulator, Scottish Hydro said it was "pleased" with recommendations on new price controls proposed by the regulator.

In the US, Baltimore Gas & Electric agreed to buy Potomac Electric Power for $3.1 bn.