The tale of a bidder bit

Profile: Keith Henry; A boy from the black stuff is having to dig deep for National Power
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The Independent Online
Keith Henry is used to being in precarious situations. He was the first man to stand on the monstrous Forties platform as it was being tipped upright in the North Sea in the early 1970s. Now he is chief executive of the electricity generator National Power as it finds itself assaulted by twin commercial and political hurricanes. In the last two weeks it has had an unwelcome approach from an American company; and it has seen the MMC's clearance of its bid for a regional electricity company overturned by the Government.

Fortunately, Henry's oil industry experience has toughened him up. "I find the whole thing great fun," he said. "I'm more at home when things are happening than staring at a spread sheet. If you're used to sitting in the middle of the North Sea with cables breaking around you, you don't give up easily."

Sitting in his City office, he looks like a relaxed, prosperous businessman. In fact he is a relaxed prosperous engineer, and he is more used to wearing a pullover than a suit. But he succeeds in his main aim: of appearing to be a man in firm control of a company that is going through a few local difficulties. Awkward ministerial decisions and aggressive US suitors are irritants that the Henry ointment will surely soothe. After which, he hopes to continue with the job of turning National Power into a giant - International Power, maybe.

If he is indeed a rock under pressure, the group is lucky to have him as chief executive just now. He took over only a year ago, and is still little-known - John Baker, now non-executive chairman, is still widely regarded as Mr National Power.That, however, is about to change. Henry will be identified clearly as the man running Britain's biggest generating company and - more important for the City - the company that has suddenly shot to the top of the most-likely-takeover-target charts.

It was only 10 days ago that Tom Boren, international head at Southern Electric of Georgia, told Henry and Baker that his company wanted to "merge" with National Power to create one of the world's biggest energy companies. They were not impressed - the merger was a euphemism for a hostile takeover. "I'd rather be part of a global British giant than an American one," he says, adding that National Power is far more efficient than its would- be buyer.

National Power's defence plan swung into action ("I always have a plan B, and this time I have several Plan Cs," Henry says). The main plank was to revive its bid for Southern Electric, the British regional electricity company (REC). This bid had lapsed in November when it was referred to the Monopolies and Mergers Commission, but NP knew it would be a good "poison pill". Southern of the US already owned a REC, and could run into monopoly problems if it tried to buy another.

The confusion generated by National Power both being bought by and buying a company called Southern was increased on Wednesday, when the second nasty surprise arrived. Ian Lang, President of the Board of Trade, said he would overturn the MMC's recommendation that NP could buy Southern. "We feel rather upset that a perfectly good strategy has been destroyed for no good competitive reason," Henry says.

Now he is cross with a number of people - Mr Lang, the folk at Southern and, perhaps most of all, Stephen Littlechild, the electricity regulator. National Power has long believed that Professor Littlechild would like it to be broken up, and sees his fingerprints all over this latest decision. It means the threat from Southern has surged again, and Henry is on to one of his Plan Cs. Even if this particular company does not bid, the City believes another cash-rich US utility will. They are not allowed to spend their beans on other electricity companies at home; and Britain is the only important country where they might be allowed to do so.

Whether they do or not would depend on the Government giving up its Golden Share, and it is this that Henry is determined to stop. "If National Power falls, PowerGen will follow, which means 55 per cent of British power generation would be in the hands of the Americans. Is that what this country wants?" he asks. "We're trying to make policy makers understand what the effect would be if the Americans bought us." He knows, however, that before an election, concepts such as energy strategy are far from the minds of politicians.

His real interest - and the reason he was brought in from the engineering group Brown & Root - is National Power's expansion abroad. He wants to do this not by buying existing companies, but by creating new capacity, and already has several projects under way, mostly in Asia. "I will be amazed if more than 50 per cent of our profit does not come from overseas in 10 years' time," he says.

Keith Henry was born in Iran in 1945. His father worked for the Anglo- Persian Oil Company (now BP), and he remembers reading at night by the light of the gas flares from the oil fields. In 1951 he and his parents were attacked by bandits while picnicking. His mother was so badly beaten that she and her young son went to the UK for treatment. By the time they were ready to return, Mohammed Mossadeq, the prime minister, had nationalised British assets. So the family returned to its roots in Bedfordshire.

After this he had a normal middle-class upbringing. He went to Bedford School, then took a degree in civil engineering at London University and a Masters at Birmingham.

His first job, in the late 1960s, was with an engineering consultancy, International Management and Engineering Group. It sent him back to Iran where he closed off the flares that had lit up his childhood and channelled the gas through pipelines to the Soviet Union instead.

He joined Brown & Root in 1971 and rode the North Sea oil boom. He helped create another field, Frigg, then went to Asia where he was "really rather happy" travelling around the jungle. He was good at his job. Good with people, he says, and good at visualising, if not so good at detail. "I could design a bridge that wouldn't fall down, but it wouldn't be a very elegant one."

At 45 he was head of the British operation, with 12,000 staff, and was in line for one of the top jobs in the States. But he decided he had been at Brown & Root for long enough, and did not want to move to America; his two daughters were still being educated, and he wanted to be near his father.

The attraction of National Power was enhanced by a pounds 100,000 "golden hello", which raised the inevitable fat cat accusations. He describes these as "good knockabout stuff". In fact his basic pay, at pounds 280,000, is modest compared with PowerGen's Ed Wallis - who gets pounds 461,000.

Where many engineers find the City incomprehensible, Henry has found parallels with his previous work that are stimulating. "When bankers get carried away with exit p/es, it does get a bit tedious," he says. "But we have good 30-minute meetings in the morning, in which we decide what needs to be done, just as I would when I built North Sea platforms."

The City certainly comes across as a shining star compared with government ministers and officials, whose indecisiveness baffles and infuriates him.