Manweb directors enjoy pounds 3-4m payoff bonanza after takeover in
Friday 13 October 1995
Directors of Manweb, the regional firm taken over last week by Scottish Power after a fierce battle, left the company with payoffs estimated to be worth between pounds 3m and pounds 4m. The main beneficiary is thought to be John Roberts, Manweb's chief executive, who gains more than pounds 1m from termination of his two-year rolling contract, share options and shares.
As the final chapter of Manweb's struggle closed, Texas Energy Partners withdrew its bid for another regional firm, Norweb, after a knockout pounds 1.8bn bid on Wednesday by rival North West Water. Texas is now believed to be preparing to launch a fresh bid for another electricity company.
Scottish Power, which by last Friday night owned or had acceptances in respect of 61 per cent of Manweb's shares, has replaced Mr Roberts with Mike Kinski, one of its own directors. Ian Robinson, Scottish Power's chief executive, becomes chairman of Manweb.
Mr Robinson called on all remaining Manweb shareholders to accept the pounds 1.1bn offer - worth pounds 9.90 per share - which has now been recommended by the outgoing board. But the Scottish group is thought to be surprised at the amount of money it has had to pay to the former directors of the electricity firm.
City analysts continued to speculate over which electricity company would be the next to fall. Texas Energy, a partnership between Houston Industries and Central South West, is known to have a shortlist of favoured targets. One industry source said: "They will analyse their options. The pressure to move is that these regional firms are a dying breed. They are becoming extinct."
Texas Energy said: "North West Water's further increased offer valued at pounds 11.70 is at a level where we see no merits for our shareholders to compete for Norweb. We wish the shareholders, customers and employees of Norweb and North West Water well."
Tom Shockley, co-chairman of Texas, said that the partners continue to believe in the rationale underlying the bid for Norweb, which at one point had been favoured by the electricity firm's board. The Takeover Panel gave Texas Energy permission to withdraw without having issued its offer document, which industry sources said will allow it more flexibility in coming back with a different bid.
Shares in London Electricity jumped by 29p to pounds 9.27 as City analysts singled it out as the likeliest alternative for the US group or for a bid from Thames Water. There was also speculation that Yorkshire Electricity could fall prey to either Texas or to GEC.
North West Water, whose pounds 11.70 per share offer has been criticised in the City as "very overpriced", yesterday took its stake in Norweb to 29.9 per cent. The company will seek shareholder approval for the acquisition at an Extraordinary General Meeting in Manchester today.
Unions attacked the plans to merge North West with Norweb, predicting that thousands of jobs will go. Unison, the public sector union, plans to lobby the EGM, dressed as "fat cats", under the banner: "Public service not private sleaze".
A union spokesman said that the takeover would benefit only directors and large shareholders rather than customers. North West has admitted that the takeover will not feed through in lower bids for water customers for several years.
One City analyst warned of the regulatory and political risks facing the enlarged group, which will now be subject to price controls and scrutiny by two watchdogs, Offer and Ofwat.
Earlier this week Jack Cunningham, Labour's trade and industry spokesman, demanded the entire electricity industry be referred to the Monopolies and Mergers Commission.
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