Outlook: Ed Wallis pulls it off

THE ONLY nose out of joint after yesterday's East Midlands Electricity deal appears to be that of PowerGen's former managing director, Deryk King. He will not be slipping into Ed Wallis's chief executive shoes after all. Never mind: three months' gardening leave and a pounds 400,000 pay-off should soften the blow.

Otherwise Ed seems to reckon he has the deal pretty much sewn up. PowerGen has learnt its lesson from two years ago, when both ministers and the Monopolies Commission balked at the idea of letting one half of Britain's generating duopoly take over a regional supply business in the shape of the next-door Rec, Midlands Electricity.

This time all the angles are covered. The regulator, Professor Stephen Littlechild, looks to have been brought onside by Ed's promise that he will sell off 2,000 megawatts of coal-fired capacity. Even Mrs Blockit, President of the Board of Trade, may have difficulty living up to her reputation since making power station disposals such a cornerstone of the Government's new energy policy. In fact, Ed looks positively like Mrs Beckett's star pupil compared with the truculent schoolboys round at National Power, who are so intent on digging their heels in.

So confident is PowerGen of getting away without a referral that the only thing on which it has made the East Midlands deal conditional is its own shareholders' approval. Taking the regulators for granted can be a high-risk strategy (as Ladbroke discovered when it bought the Coral bookmakers chain off Bass unconditionally). But Ed is also carrying a stick about with him. No East Midlands means no more coal purchases means no more miners' jobs and a big hole in the coal rescue programme.

East Midlands is, of course, only the appetiser. The main course remains the transatlantic merger with Houston Industries, which would double PowerGen in size and put it on another plane altogether. Tucking a Rec under his belt may prove to be a picnic in comparison.

Even supposing PowerGen and Houston can construct a company with dual listings in London and New York which satisfies both sets of shareholders, they still have to sort out who will run the business. As many before could testify, mergers of equals are not the easiest to pull off.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consulant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...

Guru Careers: Financial Controller

£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Day In a Page

Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Attwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works
Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

Twitter accused of 'Facebookisation'

Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

Jane Birkin asks Hermès to rename bag

The star was shocked by a Peta investigation into the exotic skins trade
10 best waterproof mascaras

Whatever the weather: 10 best waterproof mascaras

We found lash-enhancing beauties that won’t budge no matter what you throw at them
Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

Diego Costa: I go to war. You come with me...

Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
Ashes 2015: England show the mettle to strike back hard in third Test

England show the mettle to strike back hard in third Test

The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

Charley Hull: 'I know I'm a good golfer but I'm also just a person'

British teen keeps her feet on ground ahead of Women's Open
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'