Southern made power sale offer

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The Independent Online
The US utility Southern Company offered to sell up to a third of National Power's generating capacity had it been allowed by the Government to proceed with an pounds 8bn break-up bid, it emerged last night.

Southern of Atlanta, Georgia, would have disposed of an extra 3,000 to 4,000 megawatts of capacity, in addition to the 4,000 megawatts National Power is selling to Hanson for pounds 1.7bn, had its bid gone ahead.

Meanwhile, it also became clear that the other generator, PowerGen, will almost certainly sell its 21 per cent stake in Midlands Electricity to another US group, GPU-Cinergy, which launched an agreed pounds 1.7bn bid for the company earlier this week.

Southern said provisional talks had been held with a number of potential buyers - thought to include a number of regional electricity companies keen to expand their interests in generation - on the basis that the National Power bid went ahead.

The American company is understood to have explored every avenue in seeking to persuade the President of the Board of Trade, Ian Lang, to allow an offer.

However, Mr Lang refused to meet Southern's executives or their representatives and instead announced that the Government had decided to retain its golden shares in both National Power and PowerGen in view of their importance as "generating companies operating in a market which is not yet fully competitive". Mr Lang said the Government would be prepared to reconsider the position "as and when the Government is satisfied that there is adequate competition in the generation and supply markets".

His stance continues to confuse Southern and other players in the electricity market since Southern was prepared to deliver precisely this increase in competition by selling off more of National Power's capacity.

National Power has 17 stations with a capacity of 20,000MW.