N Irish electricity group Viridian jumps after revealing offer talks

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The Independent Online

Shares in the Irish electricity company Viridian leapt 15 per cent yesterday, after the board said it was considering a takeover offer for the group.

The mystery bidder is believed to be from the financial sector, rather than a rival energy company such as Scottish & Southern or Scottish Power, both of which have been linked with an interest in Viridian in the past.

Speculation yesterday centred on the private-equity group Terra Firma and the Australian investment bank Macquarie, which are among a handful of companies pursuing Thames Water. The US investment bank Goldman Sachs is also raising capital for a $3bn (£1.6bn) infrastructure fund, while its rivals JP Morgan and Morgan Stanley have been considering similar moves.

In a statement yesterday, Viridian said it was "considering" an approach, which "may or may not lead to an offer for the company".

Viridian is the holding company for Northern Ireland Electricity, which was privatised in the early 1990s. It also supplies electricity across the Republic of Ireland, and is working with the Irish government towards an all-island, single wholesale power market, due to come on line in July next year.

The approach makes Viridian the latest in a long line of utility companies to be put into play, as investors have found an increasing appetite for businesses with steady earnings streams and dividends in recent months. This week, the water company AWG became the subject of a £2.2bn bid from a private-equity firm, while South East Water was bought for £665m on Monday.

Shipping infrastructure and airports have also been targeted by the latest round of merger and acquisition activity. The Spanish infrastructure group Ferrovial bought BAA this summer, while P&O and AB Ports were also taken private this year.

Last week, Viridian issued a trading statement saying its half-year trading would be in line with expectations. Its shares have risen 58 per cent over the past year on the back of rising energy prices, and closed yesterday at an all-time high of 1221p, giving the company a market value of £1.49bn.