Scottish Power blasts target

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The Independent Online
Scottish Power chief executive, Ian Robinson, this weekend fired the first broadside of what is likely to be an increasingly bitter war in its battle for Southern Water, accusing the target's management of keeping able water managers off its board.

Last week, rival Southern Electric trumped Scottish Power's pounds 1.56bn hostile offer for the utility with a pounds 1.6bn offer, which was recommended by the Southern Water board.

The 60-day timetable starts when Southern Electric sends out its offer document, but the market confidently expects a higher bid in due course from the Scottish invader.

"It's a long game and we're going to wait. We've been here before," Mr Robinson said. "We're confident we will obtain and create value from this acquisition. Clearly, there are a lot of people at Southern Water who are very good at running water companies, but none of the people at Southern Water Services are on the board. That doesn't happen in electricity or in gas."

Scottish Power is offering cash and shares worth 975p per Southern Water share, a premium of 43 per cent above Southern Water's previous share price, with a full cash alternative of 935.7p. Its rival's paper and cash offer is worth 1,013p, with a carefully pitched 975.7p cash alternative.

This weekend, Southern Electric dismissed Mr Robinson's offer to implement a 3 per cent cut in permitted water prices for two years from 1998. Geoffrey Wilson, SE's chairman, said Southern Water was keeping prices below their cap now, and had Southern Electric's support.