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Referral may be Manweb's best hope

Manweb's initial defence against Scottish Power's pounds 1bn bid leaves everything to the imagination. The company has promised the usual goodies of cash payouts and National Grid shares but failed to give any details. At this stage of the bid, it is only to be expected that Manweb would want to keep its powder dry but it is nonetheless hard to see how the company can come up with the pounds 5 per share promised by Northern.

The very argument it uses in its defence - the strict focus on the core electricity supply and distribution business - highlights its unusual vulnerability to the wrath of the regulator. There is little comfort for Manweb from a non-regulated profit stream, and by its own admission, the recent review of electricity distribution charges was particularly harsh for the company. A Monopolies and Mergers Commission investigation may yet prove Manweb's best hope of retaining its independence.