Sweb denies water bid

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The Independent Online
SOUTH WEST Electricity has ruled itself out as a white knight for South West Water, the subject of a hostile bid last week from its neighbour, Wessex Water, writes Paul Farrelly.

Sweb, itself now owned by Southern Co of the US, had been tipped as the most likely counter-bidder. But the company said it had no intention of following a trend set by North West Water's merger with Norweb, nor Welsh Water's with Swalec last year. "Southern has no interest in water companies. There are no mixed utilities in the US," a spokesman said.

This weekend, SWW issued a stinging rebuke over Wessex's approach last Wednesday. Its announcement came at 11.45pm and only after midnight did chairman Nicholas Hood call his opposite number, Ken Court, waking him from slumber at his Exeter home. "It was a short phone call at that time of night. It was bizarre, hardly the most cordial way of opening relations," a SWW spokesman said.

The approach is now in the hands of the Monopolies and Mergers Commission, which will negotiate water price cuts. Analysts expect Wessex will have to pay 600p to 735p a share, up to pounds 900m in all. SWW shares rose 24 per cent to 616p last week.