Southern Electric extends offer for Sweb

MARY FAGAN

Industrial Correspondent

Southern Electric International of the US has extended its pounds 1bn offer for South Western Electricity to 4 September, having so far received acceptances covering 1.3 per cent of the shares.

SEI, which already owns 14.4 per cent of Sweb, is awaiting the Government's decision on whether to refer the bid to the Monopolies and Mergers Commission, which could come as early as today.

The Department of Trade and Industry has until 1 September to deliver its verdict on a referral, but industry sources believe it is imminent. Sweb, poised to offer shareholders sweeteners worth about pounds 5 a share to reject the bid, will have two working days after any government announcement to give details of its last-ditch defence.

Some City analysts believe that, in the absence of a referral, SEI could win Sweb at little more than the pounds 9 a share on offer. Sweb's shares rose 2p yesterday to 914p.

The situation is being keenly watched by Hanson, which has tabled a pounds 2.5bn agreed offer for Eastern Electricity, and by Scottish Power, which has launched a pounds 1bn hostile bid for Manweb.

City analysts believe that the proposed deal by Scottish Power is the most likely to be referred as it is the first within the industry. There is also a view that it could be referred because of Scottish Power's structure: unlike the regional companies in England and Wales, it generates power as well as distributing it over the wires and selling it to consumers. The Government opted to split generation from distribution and supply before privatising the industry south of the border.

The Office of Fair Trading, which takes advice from the industry regulator, Offer, has yet to make its recommendations to the Government on the Hanson and Scottish Power bids. Professor Stephen Littlechild, director general of Offer, called for an earlier bid by Trafalgar House for Northern Electric to be referred. He was overruled by Michael Heseltine, then President of the Board of Trade.

Scottish Power argues that none, or all, of the proposed takeovers should be referred. It fears that if it is singled out, a rival bidder with few or no existing UK operations could swoop on Manweb.

The company is believed to fear a counter-bid from a European company which may fall under the jurisdiction of the competition authorities in Brussels. Any investigation by the European Commission would almost certainly be quicker than an MMC inquiry.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions