Nomura claims sealed bids not in best interests of Hyder shareholders

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The Independent Online

Nomura, the Japanese bank locked in a fierce bid battle for utility Hyder, last night denounced the sealed bids procedure that will today decide the outcome of the contest.

Nomura, the Japanese bank locked in a fierce bid battle for utility Hyder, last night denounced the sealed bids procedure that will today decide the outcome of the contest.

After spending the day hearing objections from Nomura, the Takeover Panel said yesterday afternoon it would go ahead with its plan to end the takeover battle by a final round of sealed bids - for the first time ever. Under the takeover timetable, today is the last day for either side to raise its offer.

The sealed bids procedure has been proposed twice before by the Takeover Panel, but it was not eventually necessary in either case. It is meant to avoid having bidders rush in new offers at the very last minute.

The Takeover Panel has based the procedure on a formula, rather than an outright best price. This means that a bidder makes an offer and indicates the maximum level it is prepared to go if it is outbid. The deadline for bids is believed to be 1pm today, with an announcement of the outcome expected around 4pm.

Hyder shares closed up 3p at 381p. The shares were below 189p before takeover speculation emerged in March.

On Wednesday, Nomura raised its offer from 320p to 360p a share, or £557m. Its rival, the US utility Western Power Distribution (WPD), has offered 340p a share. Hyder, which has electricity and water assets in Wales, also has £1.9bn of debt.

A spokesman for Nomura said: "We think this [sealed bids] is totally inappropriate. It has been imposed on us. No one wanted this, except the Takeover Panel. The Panel is there to protect the interests of the shareholders of the company being bid for. This is not in the interests of shareholders."

Nomura favours allowing the contest to be extended until one side drops out. The bank yesterday denied suggestions by some analysts that it was against the sealed bids process because it no longer wanted to take Hyder over, but simply wanted to maximise the value of the 16.2 per cent stake that it owns in the company. It bought the stake at 260p a share or less.

Nomura owns no other utility assets, whereas WPD could combine Hyder with its electricity business in South-west England. But other analysts said Nomura was committed to winning and had raised its offer on Wednesday so that its final bid does not look like such a big jump from its last offer.

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