Norweb sounded out by `several companies'
Tuesday 05 September 1995
Norweb, the latest regional electricity company at the centre of takeover speculation, said yesterday that it had received approaches from several companies in recent weeks "as part of the process of deciding if they wish to acquire an interest in the electricity sector".
The company also said that it would be "no surprise" if the contacts increased in the light of the clearance last week of bids for Manweb, South Western Electricity and Eastern Electricity by Ian Lang, President of the Board of Trade. Norweb's shares rose 37p to 933p.
Norweb said that the approaches had been "tentative", and that it believed other regional firms to be in a similar position. The company, whose financial advisers are NatWest Markets, denied that specific proposals had been put to the board.
It also emerged yesterday that the Oregon-based Pacific Corporation had been keenly looking at the sector. One industry source said that Pacific had been a potential "white knight" for Sweb before it agreed to a pounds 1.1bn takeover by Southern Electric International of the US.
Pacific, which has an estimated capitalisation of pounds 3bn, is thought to be preparing to swoop on an alternative target. Another rumoured predator is Western Resources, a US utility with operations in Kansas and in Oklahoma.
Although City analysts have focused much recent attention on Houston Industries - once tipped as a predator for London Electricity - it appears to be attempting to back out of the limelight. Other potential bidders for electricity companies include Pacific Gas & Electric of San Fransisco and New Orleans-based Entergy.
While speculation continues over the next electricity company to fall to a bid, Manweb continues to prepare for the final stages in the battle against Scottish Power. The Scottish group, the only predator whose bid remains hostile, said that its shareholders approved the proposed pounds 1bn takeover at an extraordinary general meeting yesterday.
Manweb has promised a profit and dividend forecast by the end of next week and is also expected to announce a package of "sweeteners" for shareholders to persuade them to reject the bid.
Manweb yesterday denied suggestions that it was now seeking a white knight following the surprise decision by the Government not to refer Scottish Power's offer to the Monopolies and Mergers Com- mission. The shares rose by 6p to pounds 9.84 compared with the cash offer of pounds 9.15.
Separately, Yorkshire Electricity announced that SBC Warburg had reduced its stake to 3.99 per cent from about 5 per cent. SBC has had a significant stake in Yorkshire for about a year and at one point owned about 8 per cent.
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