Power sale given discount lure

Private investors in the £4bn sale of shares in National Power and PowerGen will receive a discount of up to £200 on the price paid by institutions if they register and apply through an approved share shop.

This incentive discount will be on the second and third payment installments to encourage long-term share ownership. It will be in addition to an initial discount, yet to be announced, for all investors in the UK public offer.

The extra incentive for those who buy through share shops takes the form of 25p per share on the first 800 shares allocated - roughly 5 per cent on the current share prices of either National Power and PowerGen. The discount will be divided to give 10p and 15p off the second and final installments respectively.

The Government has already said that each of three installments will fall in a different tax year. The final price of the shares will be decided through a bidding process among institutions with the sale due for completion at the beginning of March.

Private investors can choose to take bonus shares in preference to the discount, receiving one share for every 15 on the first 1,200 allocated and held until the end of March 1998. The total package is similar to that offered in the final sale of BT shares in 1993.

Sir George Young, Financial Secretary, said: "The incentives package announced today reflects the Government's ongoing commitment to wider and deeper share ownership, and I am confident it will prove attractive to retail investors considering buying shares in the offer."

Investors in the UK public offer will apply for a package of shares in National Power and PowerGen in ratio of three National Power to two PowerGen, although the partly paid shares will trade separately. The discounts announced yesterday will apply to the first 480 National Power shares and the first 320 PowerGen shares.

Those opting for the bonus share alternative will receive a maximum of 48 shares in National Power and 32 in PowerGen.

The Government, which is selling its remaining 40 per cent stake in each, of the two generators has already agreed that National Power and PowerGen can buy back up to 8 per cent of their total shares through the offer, sharply reducing the amount available to institutions worldwide.

Instalment discounts Total number Amount of Amount of Total of shares held discount off discount off discount continuously 2nd instalment final inst

100 £10 £15 £25 200 £20 £30 £50 300 £30 £45 £75 400 £40 £60 £100 500 £50 £75 £125 600 £60 £90 £150 700 £70 £105 £175 800 £80 £120 £200