MPs attack Nomura interest in Energy

Backbench Labour MPs were last night marshalling opposition to a potential takeover bid for Energy Group, owner of Eastern Electricity, by Nomura. As Chris Godsmark, Business Correspondent, reports, MPs will call for a reference to the MMC.

In an early day Commons motion, to be published today, Ian Gibson, Labour MP for Norwich in the heart of Eastern Electricity's customer region, will attack Nomura's interest as "totally inappropriate". The motion, likely to be signed by at least three other MPs with local connections, suggests ministers will come under intense political pressure to refer any Nomura bid to the Monopolies and Mergers Commission (MMC).

Nomura confirmed on Wednesday that it was in talks with Energy Group, which could lead to a bid likely to top pounds 4bn. Energy Group shares rose a further 9p yesterday to 748p on speculation.

It would be the first time a purely financial predator has launched a bid for a UK utility. Nomura's London operation has specialised in bids for everything from betting shops to pubs, which are then refinanced by issuing bonds backed by from the businesses.

Nomura yesterday issued a Stock Exchange statement which said that its 2.2 per cent stake in Energy Group, worth about pounds 85m, was held "in the normal course of its share trading activities". The statement said the stake was unconnected with Nomura's possible offer for Energy Group.

The Commons motion says MPs are "deeply concerned by the news that the Japanese finance house Nomura International is considering a takeover bid for Eastern Electricity." It continues: "It would be totally inappropriate for one of Britain's main public utilities to be owned by a City merchant bank with no experience at all of running a major utility company."

The motion also condemns a possible bid by Texas Utilities, the Dallas- based power group which is also in discussions with Energy Group. It criticises Texas's low credit rating and claims the company has had a history of problems with a nuclear power station. The motion urges that both bids, if they materialise, should be referred to the MMC.

Mr Gibson said he would ask ministers to make a statement on the issue.

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