Norweb battle becomes electric as Texas Energy raises bid


Industrial Correspondent

The battle for Norweb, the regional electricity company, intensified yesterday with an increased offer by Texas Energy Partners valuing Norweb at pounds 1.74bn. Rival bidder North West Water is now widely expected to raise its bid for a second time but Texas also made it clear it was prepared to consider another counter attack.

In the most hotly contested takeover attempt in the sector so far, Texas raised its offer to pounds 10.85 per share compared with North West's increased cash offer last week of pounds 10.75 with an pounds 11.05 in cash and shares.

The US group, a partnership between Houston Industries and Central and South West Corp (CSW), said its increase provides shareholders with a "generous and certain return on their investment".

Tom Shockley, president and chief executive officer of CSW Enterprises, said: "In contrast, North West Water's cash and share offer contains a significant share element that may be adversely affected by a number of factors including a shortfall in the timing, scale and delivery benefits and the financial risk of diversifying into an activity of which North West Water has no direct experience." Mr Shockley said he was "disappointed" at having yet failed to persuade Norweb's board to recommend the new offer but added: "We will convince them."

The renewed offer came as the industry regulator, Professor Stephen Littlechild, issued a consultation document on the Texas bid. Professor Littlechild said the bid raised some of the issues surrounding previous bids for regional electricity companies, including the holding of a public electricity supply licence by a subsidiary rather than a parent company.

He warned this raises concerns about the availability of resources, disposal of assets and the regulator's ability to obtain information. Professor Littlechild would make licence amendments to deal with these concerns, which would involve the ring-fencing of the electricity supply and distribution operations from other parts of the parent group. He also said Texas should not retain Norweb's stake in the National Grid Company, which is due to be floated later this year.

Norweb's board said it would recommend neither offer because of their proximity in value. The company said it would make a recommendation "in due course in the light of North West Water's share price performance and the decisions of the various regulatory authorities". The bid by North West is unusual in that it is being examined by both Offer and the water watchdog, Ofwat.

North West Water declined to comment on the renewed ofensive from Texas Energy and said that it would respond in due course.

The company is expected to consult with its big shareholders before deciding its next move but the consensus among City analysts is that the water group is determined to absorb Norweb in its drive to become a major force in the region.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Reimagined: Gwyneth Paltrow and Toni Collette in the film adaptation of Jane Austen's Emma
Arts and Entertainment
Jesuthasan Antonythasan as Dheepan
Cannes 2015Dheepan, film review
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Arts and Entertainment
The pair in their heyday in 1967
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine