Sweb bid to receive green light

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The Independent Online
THE Department of Trade and Industry is expected to decide this week whether an American bid for South Western Electricity can go ahead or will be referred to the Monopolies and Mergers Commission.

Political observers think Southern Electric International of Atlanta, Georgia, is likely to get the go-ahead from ministers as there are few competition issues surrounding its pounds 1bn offer for Sweb.

A fortnight ago the DTI requested an extension of the deadline for deciding on a referral because ministers had not had time to study recommendations from Offer, the electricity regulator.

Although the extension runs to September, but all three DTI ministers involved - Board of Trade President Ian Lang, competition minister Jonathan Evans and energy minister Tim Eggar - have now returned from holiday.

Even if they do clear the bid, it could still end up before the MMC if Offer and the Americans are unable to reach agreement on regulatory issues.

Scottish Power's pounds 1bn bid for Manweb is also expected to go before the DTI soon, but it is considered more likely to be referred immediately as it involves one regional electricity company taking over another.

Unless political considerations delay the announcement, the clearing of the way for Southern will probably be straddled by defensive announcements from the two target companies.

Manweb is scheduled to issue its first defence document tomorrow, but industry analysts say it will be more bark than bite.