Outlook: French folly

THE FRENCH won the bid battle for London Electricity with some nifty Gallic footwork. Having paid over the cash, Electricite de France then hopped back over the Channel assuming that the deal would sail through the regulatory authorities. It has now had a nasty shock.

So sure was EdF that the deal would fall to Europe to vet that it persuaded the Brussels bureaucrats to waive the rules which normally prevent unconditional bids being tabled. Now the new Trade Secretary Stephen Byers has rather upset the apple cart by requesting that jurisdiction to vet the deal be handed back to the UK.

These are not the kind of requests that national competition authorities often make, nor are they the sort that Brussels often refuses. The one thing that EdF knows for sure is that it will get a rougher ride in London than Brussels.

Mr Byers' predecessor, Peter Mandelson, had already made it plain that he was not impressed by the way that the cross-Channel interconnector acts as a one-way street to pump subsidised nuclear power into Britain at the expense of coal. Nor is EdF's case improved by the fact that it is bid-proof.

A six-month monopolies investigation looks to be the least that EdF can expect, followed by a set of conditions which redress the imbalance. If so, it will not be the first company to discover that second-guessing the regulators can be a risky business. As Bass, Ladbroke, Tomkins and PowerGen have all discovered to their cost, it pays to ask for permission first.