Threat of egm for Northern

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The Independent Online
Shareholders in Northern Electric will attempt next week to force the company into an extraordinary general meeting to consider a renewed bid by Trafalgar House. Wyser-Pratte, the US-based shareholder leading the rebellion, said support for an egm is mounting and the requisition could be served within days.

Some Northern shareholders were angered by the company's refusal to allow a £9.50 bid by Trafalgar following the lapse of an £11 per share bid at the beginnning of March. A new bid cannot proceed without the consent of Northern's board and the company has said that it will not agree until regulatory uncertainty over electricity prices has ended , which will take at least until June.

Wyser-Pratte has written to Northern's board, accusing it of "cavalier disregard" for shareholders and failing in its duty to them. Wyser-Pratte asked Northern Electric to respond by today and last night had heard nothing. A spokesman for Wyser-Pratte said: "We believe we can get to the 10 per cent of shareholding needed for an egm. We can move pretty smartly after the deadline we set." He said allies include British institutions as well as fellow arbitrageurs. In addition to those willing to sign requisition forms for an egm, he said there is a more general desire among institutions to be allowed to consider a new bid.

A spokesman for Northern said: "We will respond in some form." However, he added that Northern remains unwilling to bend to pressure by allowing Trafalgar House to come back before June. The company's share price rose by 16p to close last night at £7.45.

The £11 bid by Trafalgar House lapsed after the regulator, Offer, threatened to re-open a price review agreed last August. The move was prompted by increases in the share prices of the 12 regional electricity companies and by the £560m in sweeteners Northern offered to shareholders to refuse the Trafalgar bid. Trafalgar, which came back almost immediately with proposals for a £9.50 bid, argues that a price review and its aftermath could drag on for almost a year.