National Power plea to Panel

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The Independent Online
National Power is expected to go to the Takeover Panel next week to force a statement from Southern Company clarifying whether or not it intends to proceed with an pounds 8bn bid.

Sources close to the generator said yesterday that the American group would have to "put up or shut up" quite shortly by making its intentions clear.

A rumoured dawn raid by Southern on National Power failed to materialise yesterday. Speculation continues, however, that it will make a bid despite the shock ruling from Trade and Industry Secretary Ian Lang on Wednesday barring takeovers by National Power and PowerGen of two regional electricity companies.

The fall-out from the Lang ruling continued to be felt elsewhere in the utility sector with conflicting rumours surrounding the water company Severn Trent, which is preparing for a takeover battle with Wessex Water for control of South West Water.

One report said Severn Trent was considering dropping its bid for South West and seeking instead an agreed merger with Midlands Electricity. Another rumour was that Severn Trent was itself about to be bid for by an American utility.

The rumours propelled Severn Trent shares up 27p to 617p. However shares in South West Water drifted lower as the market was gripped by speculation that Mr Lang might intervene to block further consolidation in the water industry in the way he did this week in electricity.

While the City and the power industry were grappling with the implications of the Lang ruling, PowerGen announced the departure of another executive director, Michael Reidy, head of corporate affairs.

Mr Reidy is the director who masterminded the pounds 450m sale of two power stations to Eastern Group - a deal which PowerGen may now not proceed with following the Government's refusal to allow it to acquire Midlands Electricity.

His departure follows that of finance director John Rennocks who confirmed his resignation a month ago.

A PowerGen spokesman said Mr Reidy's resignation was unconnected with the blocking of the Midlands bid and had been agreed some time ago.

He joined the company from the Civil Service at the time of privatisation six years ago. PowerGen's chairman Sir Colin Southgate said he has made a "substantial and highly successful contribution".