National Power takeover fever grips market
Wednesday 17 April 1996
City analysts speculated that US utilities, including Southern Company, could be potential predators. A bid for National Power would require the approval of the Government, which retains a golden share in the company. Agreement by ministers to a takeover, particularly by a foreign group, would almost certainly cause a political furore. It is just over a year since the Government sold its last stakes in National Power and PowerGen for pounds 4bn.
A team from SBC Warburg, the merchant bank which last year advised Southern on its pounds 1.1bn bid for Sweb, was last night locked in meetings and unable to comment. Some City analysts said that National Power, headed by John Baker, would be too big a target for Southern on its own but there was also speculation over a potential joint takeover. Some analysts think Southern Electric would be willing to dispose of some of National Power's generators over and above that planned by the company itself.
Within the industry the speculative talk yesterday focused on the arrangement of a rumoured $12bn (pounds 8bn) loan facility by banks including Barclays de Zoete Wedd and SBC Warburg.
Other names mentioned amid the bid fever included Houston Industries, Pacific Gas and Electric and Mission Energy of the US. One analyst said potential European predators could include Spain's Endesa and Electricite de France. "We are seeing the sort of smoke that we rarely see in this industry without fire. The reason National Power's name has not been in the frame before is simply its size," he added.
The bid flames were fanned earlier in the day following reports that Southern Company of the US was close to selling a large stake in South Western Electricity with a view to making further investments.
Bill Dahlberg, Southern's chairman, said it had no intention of losing control at Sweb, which it bought for pounds 1.1bn last year. But he said it would be "advantageous" to sell a minority interest "to regain some of our financial investment and then reinvest that on other quality companies like Sweb".
Mr Dahlberg did not comment on the generation business, although Southern is thought to have been keen at one time to buy power plants being sold by National Power under pressure from the regulator, Professor Stephen Littlechild. Mr Dahlberg added that he did not envisage buying another UK regional electricity firm "at this point".
National Power declined to comment on the rumours. A spokesman for Southern Company refused to respond to speculation that it might bid for a British company following disposal of the Sweb stake. There was talk in the City earlier that Southern may seek to acquire South West Water, which faces potential rival bids by Severn Trent Water and Wessex Water.
Mr Dahlberg had said he saw "an opportunity coming in pretty quickly to bring in water business in a country outside the US".
The rumours emerged at a sensitive time for National Power, which is awaiting the Government's response to a Monopolies and Mergers Commission report on its proposed takeover of Southern Electric of the UK. Ministers were outraged at the end of last week following the leak of the MMC report on the National Power takeover. The Economist magazine reported that the MMC had recommended that the Government approve National Power's takeover of Southern and that of Midlands Electricity by PowerGen.
Separately, Utilicorp of the US said it would buy out the remaining 25 per cent of its UK subsidiary, which has gas marketing joint ventures with several regional electricity firms. The stake, thought to be worth about pounds 15m, was owned by a company called Norland Gas whose directors included Sir Ian MacGregor.
Comment, page 21
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall during coming week with sub-zero temperatures to last until early February
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
UK weather: Snow to fall during coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
Ellen DeGeneres leads Johnny Depp, Gwyneth Paltrow and Paul Bettany in revealing game of Never Have I Ever
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...