Earlier this month Texas trumped PacifiCorp's 820p bid for Energy with an 840p offer valuing the group at pounds 4.45bn. PacifiCorp is now waiting to see whether the Texas bid is referred to the Monopolies and Mergers Commission. PacifiCorp was referred to the MMC last year and subsequently cleared to re-bid subject to licence amendments to ring-fence Eastern, Britain's biggest regional electricity company and fourth- biggest generator. Should Texas avoid the MMC, PacifiCorp will either have to outbid it or withdraw.
Industry observers question whether PacifiCorp could bid beyond 840p on its own. It has already sold its telecoms business to help finance the bid and is limited in how much more debt it can take on.
Texas is paying its financial advisers, Lehman Brothers and Merrill Lynch, $19m (pounds 11.5m) in fees. The banks are helping underwrite and arrange a $10bn credit facility to finance the bid along with Chase Manhattan. The Texas offer document also confirms the credit facility is only conditional on its offer receiving more than 50 per cent acceptances. Pacificorp needs more than 90 per cent.