Ofwat plunges Welsh offer into confusion

Ofwat, the water industry watchdog, plunged Welsh Water's agreed pounds 872m bid for South Wales Electricity into confusion last night by warning that the group may be forced to list its core water operations separately on the Stock Exchange.

Ian Byatt, director-general of Ofwat, yesterday said the merger would reduce his information on the regulated water business and that the issue could be resolved through a separate quote.

A spokeswoman for Mr Byatt said a separate listing was likely to be a feature in all future mergers involving the 10 big water and sewage companies.

The issue was not raised earlier this year when North West Water acquired Norweb, the electricity firm operating in the same area. But Lyonnaise des Eaux of France recently agreed to list all its UK water interests by 2005 as part of the Government's clearance of its takeover of Northumbrian Water.

In a consultation document issued yesterday, Mr Byatt said: ``I would welcome comments, in particular, on the effect the merger could have on managerial effectiveness. We have also drawn attention to the fact that Swalec's stock market quotation would disappear and the characteristic of that of Welsh Water's quotation would be radically changed. This would lead to a loss of information about the way investors view the companies."

Ofwat said the bid raised similar concerns to those relating to the bid by North West Water for Norweb, but added: ``The world moves on and we would like to see this [separate listing] in all future takeovers in the industry." A spokesman for Welsh Water said the watchdog was consulting on the possibility rather than saying it would happen. ``We will respond in due course," he said.

A spokeswoman for the electricity regulator, Offer, said it was not asking for a separate listing for the core electricity operations in South Wales. But Professor Stephen Littlechild, director-general of Offer, is also concerned about loss of information and is likely to seek amendments to the operating licences to resolve the issue.

The consultation, being conducted jointly by Mr Byatt and Professor Littlechild, will result in a recommendation to the Office of Fair Trading, which in turn advises the Government on whether the bid should be referred to the Monopolies and Mergers Comission.

The document warned that the regulators at present have wide-ranging powers to acquire information from regulated companies about their regulated activities and that they need to secure continued access to sufficient high-quality information to allow them to carry out their duties.

Professor Littlechild has already produced licence modifications to achieve improved access to information. These will be formally published after further discussion with the companies concerned.

people And here is why...
peopleStella McCartney apologises over controversial Instagram picture
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
ebooksAn unforgettable anthology of contemporary reportage
William Hague
people... when he called Hague the county's greatest
indybestKeep extra warm this year with our 10 best bedspreads
Life and Style
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

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?