Takeover talk lifts London Electricity

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The Independent Online
Takeover speculation engulfed London Electricity yesterday following reports that Entergy, the US utility, was preparing to mount a pounds 1.2bn bid.

London is one of only five remaining regional power suppliers still independent out of 12 at the time of privatisation six years ago. Two of the five, Northern and East Midlands, are already the subject of takeover bids.

The speculation boosted London's share price 28.5p to 665p as rumours about Entergy's intentions switched from Yorkshire Electricity. Shares in Yorkshire fell 7p to 739.5p while Southern Electric also dropped 4p to 702.5p.

Both London and Entergy refused to comment on the share price move. "All we can say is what we always say, that we do not comment on speculation," a London spokeswoman said.

The reports from the US had claimed Entergy, based in New Orleans, had singled out an unnamed UK bid target which closely resembled London. The reports suggested a formal offer would put a price tag of pounds 7 on each share in the company.

Entergy has made no secret of its intention to make further investments in Britain. It already has a joint venture with BP to build a large gas- fired power station near Hull and has an office in central London. The group is known to have engaged merchant bankers Morgan Stanley.

With 2.2 million customers and revenues last year of $6.5bn (pounds 3.9bn) Entergy is one of the largest US utility firms. It has expanded overseas in recent years, investing across South America, in Hong Kong and Pakistan. It also paid more than $1bn for the company which supplies electricity to customers in Melbourne, Australia.