Hyder shares face suspension as bid battle enters unchartered waters

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Shares in Hyder are likely to be suspended this morning with no clear indication of when the hapless takeover battle for the Welsh power and water utility will be concluded.

Shares in Hyder are likely to be suspended this morning with no clear indication of when the hapless takeover battle for the Welsh power and water utility will be concluded.

On Friday, Japanese bank Nomura lodged an appeal with the Takeover Panel against its decision to favour a 365p-a-share bid by the American group Western Power Distribution (WPD).

Nomura, whose bidding has been led by Guy Hands of the bank's PFG arm, is claiming the offer is not valid as it was not carried on Stock Exchange screens before the market closed at 4.30pm on Friday.

It has emerged that a hearing of the appeal could be delayed until tomorrow. With confusion surrounding whether WPD's bid or Nomura's offer is valid observers argued that Hyder shares were operating in a "false market" and the stock would have to be suspended.

On Friday shares in Hyder, which is headed by chief executive Graham Hawker, closed at 385p up 4p, with investors unaware of WPD's 365p offer.

The potential acquisition of Hyder is now in uncharted territory. Under Stock Exchange rules the takeover timetable ran out on Friday.

The decision to favour the WPD bid was made by a small executive committee of the Takeover Panel. But the appeal will have to be heard by members of the full Panel and observers said it could take until tomorrow to gather sufficient members for the hearing. Nomura and WPD will lodge written submissions today.

It is understood that the Japanese bank will argue that WPD's bid was not full and valid. Nomura will also say that it is prepared to increase its offer by 5p to 365p a share to match the US company's bid.

WPD is expected to point out that Nomura did not submit a sealed bid by the 1pm deadline on Friday. It is also likely say that if Nomura had any problems with sealed bidding procedure it should have raised them earlier. It is understood that Hyder's advisors, Dresdner Kleinwort Benson, had to clear a statement on WPD's offer on Friday. But it only received the document from the Takeover Panel shortly before the market closed.

Nomura could also seek a judicial review of the decision by the Takeover Panel which could hold up the sale of Hyder for weeks. Sources yesterday said that if the Takeover Panel found in favour of Nomura's complaint this week it could call for a fresh round of bids.

Analysts have been surprised at the price the two bidders have been prepared to offer for Hyder. It is understood that WPD offered 360p a share and set a ceiling of 375p or 380p as the maximum it was willing to pay for Hyder.

Hyder, which was floated at 240p a share in 1989, saw its shares reach a high of 1,048.5p in 1998, then fall away sharply. Before takeover speculation emerged in March this year the stock was trading at 190p.

The takeover battle for Hyder has been dogged by controversy and acrimony since it began. At one point, Nomura alleged Deutsche Bank breached the Companies Act by failing to disclose its acquisition of a 7.23 per cent stake in Hyder within the statutory two-day notice period.

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