ScottishPower reveals float plans for telecoms division
The country's second-largest utility said it would sell-off between 25 and 49 per cent of Scottish Telecom, which analysts value at between pounds 1bn and pounds 2bn.
Some market-watchers expect that the run-up to the change of year could witness unusual liquidity patterns as investors stay out of markets to minimise risks from y2k-inspired computer failures. Gerling, a German insurance company, has delayed its pounds 1bn float in London until after the new year.
Ian Russell, ScottishPower's deputy chief executive and finance director, said the long-planned sale would release the value of the phone and Internet business.
News of the floatation had been expected since ScottishPower appointed Goldman Sachs earlier this year to advise on options for developing Scottish Telecom. The transaction will not include ScottishPower's mobile phone operations.
"There is a lot of talk about the last time that we can make an issue ... I think that we are determined to get this done in 1999, before Christmas," Mr Russell said.
The listing will comprise an offering of ordinary shares, marketed to institutions on both sides of the Atlantic.
Mr Russell said that the size of the float would depend upon the strength of demand from potential investors, but ScottishPower would retain a majority interest in the business.
"We thought that this was an appropriate time for us to realise value for our shareholders," Mr Russell said.
Michael Hughes, director at Baring Asset Management, said that many investment houses had already taken "insurance positions" over the summer, and could stand ready to capitalise on any radical shifts in price caused by the millennium.
"It's not an impossible time to do business, but could be different," Mr Hughes said. "The end-of-year effect has already been discounted. The insurance is already in place... "
ScottishTelecom, which had sales of pounds 166m in the year to March, operates telecom and Internet services across the UK and in the Netherlands.
In April 1998, it acquired for pounds 66m the Internet portal, Demon Internet, Britain's second-largest web-hosting business. It also provides call centre and tele-marketing services.
Mark Robinson, an utilities analyst at ABN Amro, said: "It's a good business; Scottish Power have done well to develop it."
Analysts said ScottishPower was keen to try to emulate the success of the National Grid, the power transmission company which spun off its telecoms business, Energis.
Since their debut two years ago, Energis shares have surged. They ended 33p lower yesterday at 1,467p.
One analyst said yesterday: "I think that the listing is feasible. They've been preparing behind the scenes. It is tight, but ScottishPower are very organised." Scottish Power shares added 15.5p yesterday to close at 601.5p.
Predictions of problematic market conditions in December are not shared by everyone, however. Marshall Whiting, analyst at SG Securities, said: "I don't think that there's anything in the millennium issue - it is just an excuse for people to do no work."
Sales of the tablet are set to fall again say analysts
World's most lethal spider found under a bunch of bananas
British supermodel and hitmaker join forces to launch a 'huge song'
Rumours that the star wants to move on to pastures new
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
- 3 Star Wars memorabilia called a 'bit of plastic' on Antiques Roadshow by Fiona Bruce valued at £50,000
- 4 Meet Thea, Norway's 12-year-old child bride
- 5 Russell Brand might seem like a sexy revolutionary worth getting behind, but he will only fail his fans
Kobani: Fifteen-year-old boy taken captive with suspected jihadist 'shot in the head by militant group' fighting against Isis
Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
Isis fighters 'crucify' 17-year-old boy in Syria
Oscar Pistorius sentencing: Olympic star must serve 10 years, prosecutor urges
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
iJobs Money & Business
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...
£50000 - £55000 per annum + bonus + benefits: Ashdown Group: IT Relationship M...