ProShare frowns on Gas split

ProShare, the promoter of wider share ownership, yesterday said British Gas's decision to slim down its share register was "unfortunate", writes Peter Rodgers.

Stuart Valentine, ProShare's head of research, said: "They invented Sid in the first place and are giving the impression now that they are turning their back on him."

"Tell Sid" was core of the marketing campaign for British Gas's privatisation in 1986 but on Tuesday Richard Giordano, the chairman, said the share register had become too unwieldy and the company was looking at ways of slimming it down, perhaps with incentives for smaller holders to sell cheaply.

Mr Valentine acknowledged that British Gas Energy, one of the two quoted companies into which British Gas is to be split, might be a less appropriate vehicle for small shareholder investment than British Gas is now, because it will carry the liability for potentially loss-making gas-supply contracts. "That may not be the right sort of company for private investors," he said.

However, the British Gas move could accelerate a decline in private share ownership, which is thought to have shrunk over the last six months from the last recorded total of more than 10 million, partly because of the takeovers of electricity companies. But ProShare said demutualisation of building societies and insurance companies "might send it zooming up again".

With the City still undecided about the merits of the demerger plan, Moody's, the credit rating agency, delivered a blow with a statement that it was reviewing the British Gas for a possible downgrading.

A successful demerger would be a positive step but many hurdles remained, Moody's said. Renegotiation of British Gas's loss-making gas purchase contracts, to be held by the new supply business BGE, faced a far from certain outcome.

North Sea gas producers were expected to review their positions in the light of the transfer of the contracts to the supply arm. If the negotiations could be settled successfully without recourse to TransCo International, the pipeline company, or British Gas, it would have positive implications for the credit quality of the latter two organisations, Moody's said.

Meanwhile, independent gas suppliers that are to compete soon with British Gas in the domestic market said there were still questions over the demerger plan. Roger Turner of United Gas said he wondered whether the plan should have been taken further, by splitting the monopoly UK gas transmission business into two, making three entities altogether. "I don't relish the idea of Transco borrowing against transmission assets and blowing it all abroad," Mr Turner said.

Start your day with The Independent, sign up for daily news emails
News
people

Harry Potter actor suffered 'severe flu-like symptoms' on a flight from London to Orlando

Arts and Entertainment
Legendary Star Wars filmmaker George Lucas
film
News
news
Arts and Entertainment
tv

First full-length look is finally here

PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Frank Turner performing at 93 Feet East
musicReview: 93 Feet East, London
News
Toronto tops the charts across a range of indexes
news

World cities ranked in terms of safety, food security and 'liveability'

Extras
indybest
Voices
A mother and her child
voices
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
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

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee