An original £11-per-share bid lapsed last week after the regulator, Professor Stephen Littlechild, plunged the electricity industry into turmoil with threats of new price caps.
Under Takeover Panel rules, Trafalgar must wait 12 months before launching a new hostile offer. Northern Electric has said it will allow a new bid - although not necessarily recommend one - only when regulatory uncertainty has cleared. This is likely to take until June at the earliest, but could drag on for many months.
Trafalgar House said the Panel's decision was "disappointing" in the light of support from many Northern shareholders who wanted to be allowed to consider a new bid at £9.50. "The Takeover Panel did not exercise its discretionary powers to allow such an offer. In the circumstances, Trafalgar House's offer of £9.50 cannot stay on the table," the group said. Trafalgar's bid battle has cost an estimated £6m-£7m since it was launched in mid-December.
The Panel acknowledged the unusual situation, but said that its sought to achieve a "reasonable balance" between giving shareholders the opportunity to consider offers for their shares and enabling the target company to carry on its business without being in a prolonged state of uncertainty and siege. Shares in Northern Electric fell by 54p to 727p.
Northern Electric was relieved but not jubilant after the decision. David Morris, chairman, said: "We are at least now clear where we are. We have a lot of work to do. We recognise the possibility if not probability of another bid from Trafalgar House. We must put our energy into reducing costs."Reuse content