Wednesday 20 January 1999
This was always going to be a controversial means of value recognition. Why not follow your own path to stock market independence, free market purists asked, and simply demerge Energis? All kinds of ingenious excuses were tabled, but essentially it came down to this quite basic line of reasoning -- because National Grid, having given birth to Energis, wanted to keep some of the potential upside in the stock for itself.
In a way, it has been proved correct. The telecoms sector has soared and with it, Energis. The Grid's remaining 75 per cent stake has come to account for more than 40 per cent of its total stock market value, and everyone, the Grid's management included, has been able to bask in its warm glow. Time, then, to sell some more. Fortunately for the Grid, there can be no question of a demerger this time round. Having already sold some of the company, the tax implications would be horrendous.
But essentially it is still the same old thing. David Jones, the Grid's laconic chief executive, just cannot let go. The Grid's bankers are even creating a convertible bond, backed by the Grid's own cash flow, to allow the Grid to participate in the potential upside of the shares they are selling. Since disposing of another 25 per cent will allow Energis to qualify for the FTSE 100 Index, this could be quite considerable.
Given how much money he's made for his investors, nobody's going to quarrel too much with Mr Jones about all this. Who knows? There may be another Russian doll or two yet to be moulded out of the pounds 1.2bn the Grid will receive from this latest sale.
All the same, there is a certain lack of logic about the Grid's position. As quickly as it sells out of Energis, it is investing in exactly the same sort of telecom ventures elsewhere, most recently in Brazil. There is an obvious conflict of interest here that won't finally be resolved until the G
rid is out of Energis altogether.
- 1 Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Bill Cosby: Isn’t it obvious why his accusers have stayed silent up until now?
- 4 Halle Berry takes ex-boyfriend Gabriel Aubry to court for allegedly trying to make daughter look less African-American
- 5 Isis propaganda image showing 'abuse of Muslim woman by soldiers' is actually taken from Hungarian porn film
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Ferguson decision: Tea Party website mocks Michael Brown's family over T-shirt typo
Michael Brown shooting: Ten things we know – or know better – now the Ferguson grand jury's work is over
Isis propaganda image showing 'abuse of Muslim woman by soldiers' is actually taken from Hungarian porn film
Derren Brown on the disappointment of coming out: 'It’s not that people react badly to it – they really don't care'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Revealed: How the world gets rich – from privatising British public services
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£Attractive: Citifocus Ltd: High calibre individual with significant product d...
£Negotiable: Citifocus Ltd: Leading global bank seeks experienced credit analy...
£Attractive Package: Citifocus Ltd: High calibre individual with a high degree...
£Attractive: Citifocus Ltd: High calibre individual with superior academics an...