PowerGen's pounds 1.5bn sale exceeds best hopes

POWERGEN is set to raise up to pounds 1.5bn from the sale of two of its coal-fired power stations - far more than the auction had been expected to raise.

Five bidders have submitted offers for the stations - Ferrybridge and Fiddler's Ferry - all of which are well in excess of the reserve price of pounds 900m originally indicated by PowerGen.

Leading the bidders are the nuclear generator, British Energy, and the recently merged Scottish and Southern Energy. Mission Energy of the US, which bought the National Grid's pumped storage power stations, has also submitted a bid, as has John Devaney, the former chairman of Eastern.

The fifth bidder is thought to be the US utility Entergy, which recently sold London Electricity to Electricite de France for pounds 1.9bn. Centrica, the trading arm of the former British Gas, has not made a bid.

The sale of the two stations, which have a combined output of 4,000 megawatts, is due to be completed in April. The sale was forced on PowerGen by the electricity regulator in return for approval to buy East Midlands Electricity.

Once East Midlands is fully bedded in PowerGen, led by chairman Ed Wallis, is expected to make the purchase of another regional electricity company its priority. It is also looking at further overseas expansion and has targeted India, Thailand and China, where it could buy generating plant that is already running.

PowerGen also remains interested in a US acquisition despite the failure to pull off the pounds 10bn merger of equals with Houston Industries. The deal was called off last summer just four days before it was due to be signed. PowerGen had even completed the corporate staff video explaining the rationale for the merger.

Meanwhile the new energy regulator, Callum McCarthy, said Scottish Power may have to hive off its Scottish supply and transmission business into a completely separate company to gain approval for its acquisition of the US electricity company PacifiCorp.

Southern Electric and Scottish Hydro-Electric agreed to hive off their generating activities within three years as a condition of being allowed to merge.

In a consultative document, Mr McCarthy said Scottish Power's US deal raised concerns about its ability to fund its UK operations. He said safeguards might have to be put in place to prevent resources being diverted elsewhere.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
News
General Election
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Ashdown Group: Head of Client Services - City of London, Old Street

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders