Texas pursues Energy

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The Independent Online
TEXAS Utilities, which has until 9 March to decide whether to bid for Energy Group, said it is still keen on topping PacifiCorp's pounds 5.93bn ($9.78bn) offer for the British power and coal company.

"We are still very serious at this stage," said David Anderson, a spokesman for the company. Analysts expect Texas Utilities to make a bid during the course of next week of around pounds 8, a 35-pence-a-share increase on PacifiCorp's offer.

Whoever wins will become the 11th US company to buy a UK power company since 1995. The companies have been drawn here by the prospect of higher returns in a less regulated market, as well as the opportunity to gain a foothold in Europe as its power market slowly deregulates.

Texas is still negotiating details with Lehman Merchant, the private equity arm of Lehman Brothers International on the sale of Energy Group's Peabody Holding, the US's largest coal company, and Citizens Power, an energy trading business, people familiar with the negotiations said.

It needs to agree to sell the businesses, valued by analysts at $2.5bn, to avoid delays from US regulators, which would make its bid uncompetitive. "If we bid, all aspects of the transaction will be sewn up including the coal piece," Mr Anderson said.

On Friday Energy Group shares fell half a penny to close at 778p, indicating investors expect Texas to bid.

Copyright: IOS & Bloomberg

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