SEI has back-up takeover plan

Southern Electric International of the US is expected to target another regional electricity company should its pounds 1bn bid for South Western Electricity fail.

The group has been waiting for 18 months to make its move into the UK market, and is prepared to launch a fresh offensive if initial plans fall through.

A source in the company said SEI remains confident of taking over Sweb, which would represent its biggest acquisition to date. He said the big attractions for SEI include the regulatory regime in Britain and the political stability - factors which would hold in the case of other regional firms. Tom Boren, president and chief executive officer, said when he launched the bid that the UK would be an important plank in its international expansion plans.

Sweb, which has attacked the pounds 9-a-share offer as a "sighting shot", is not expected to launch its final defence against the bid for about two weeks.

The company has hinted at a package of sweeteners for share holders that could be worth as much as the pounds 5-a-share offered by Northern Electric in of an earlier bid by Trafalgar House. It is thought that Sweb is prepared to gear itself substantially to finance the package. The takeover vehicle being established by SEI would in any case have a gearing of 120 per cent. Sweb's share price rose 4p yesterday to 907p.

Speculation of further bids in the sector continued to focus on London Electricity, with shares in the company rising 15p to 789p. Rumoured predators include another large US utility, Pacific Gas and Electric, as well as RWE, a German group that includes the country's biggest electrical utility. London, which holds its AGM today, declined to comment.

Separately, Eastern Electricity used its AGM to call for shareholder support for the pounds 2.5bn recommended offer by Hanson, the industrial conglomerate.

James Smith, chairman, said: "We believe the price is very satisfactory and in the interests of shareholders."

He also attacked the recent review of the company's distribution charges by the watchdog, Professor Stephen Littlechild, as "unjustified".

Eastern's shares rose 6p to 925p yesterday while those in Manweb, which is fighting a pounds 1bn bid by Scottish Power, rose 5p to 872p. Shares in Northern Electric, awaiting a possible renewed attack by Trafalgar House, were also up 5p at 894p. Under Takeover Panel rules, Trafalgar House must make its intentions clear by next Thursday. The group lapsed an pounds 11-a-share offer in March and was subsequently prevented by Northern's board from coming back at pounds 9.50 a share.

Some City analysts believe Hanson's pounds 9.75-a-share offer for Eastern Electricity has set a benchmark that Trafalgar will be unwilling to match. There is also some nervousness among City analysts over a potential reference of the sector to the Monopolies and Mergers Commission.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
filmIdris Elba responds to James Bond rumours on Twitter
News
Hackers revealed Oscar-winning actress Lawrence was paid less than her male co-stars in American Hustle
people
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
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

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015