Manweb turns to US white knight

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The Independent Online
The white knight talking to Manweb, the Chester-based electricity company, emerged yesterday as Pacificorp, based in Oregon in the north-west United States.

Last week Manweb announced it was talking to potential bidders from abroad as part of its search for an alternative to a pounds 1.13bn hostile bid on the table from Scottish Power.

But the Pacficorp talks, which have intensified over the last four days, are not thought to have reached agreement yet and the signs last night were that if a counterbid is to emerge it could take several days more to materialise.

Sources close to Scottish Power expressed scepticism about whether an offer would emerge, though under the current bid timetable Pacificorp has until Friday week to intervene.

Pacificorp has a market value of about $5bn (pounds 3.2bn) and operates mainly coal-fired power stations in its home state.

It is tipped as the most likely to make a move among a clutch of American utilities investigating UK electricity industry takeovers. Pacificorp was already among those thought to be talking to Norweb, the target of a bid from North West Water.

However, the Norweb talks were not substantive enough to merit a Stock Exchange announcement and the news of Pacificorp's closer interest in Manweb suggests they could be dropped.

Manweb's strategy to fend off Scottish Power also includes an offer to shareholders of a pounds 600m package of special dividends and other payments.

Since Scottish Power's offer has already been cleared by Ian Lang, the president of the Board of Trade, any counterbidder would have to be confident of clearance as well.

A foreign utility is unlikely to raise such serious competition or regulatory issues that the Government would refer it to the Monopolies and Mergers Commission.

But the City is sceptical about the emergence of the first contested bid for a regional electricity company, because there are still so many other untouched targets.

Meanwhile, speculation is growing that National Power, which is studying whether to bid for a regional electricity company, is poised to make a move, probably early next month when it will become clearer whether the bid by rival PowerGen for Midlands Electricity will escape a reference. Southern Electricity and Yorkshire have been widely tipped as targets.