Animostity between the two groups heightened last night as Northern Electric complained to the Takeover Panel alleging information contained in the document had been leaked.
David Morris, chairman of Northern Electric, said:"We have complained that we were denied access to the document and that some members of the press had it ahead of us."
Mr Morris also said that he has asked the Stock Exchange to look at "contracts for differences" entered into by Trafalgar and its advisors, Swiss Bank, to help cover costs. Options taken by Swiss Bank on shares in several electricity companies, includingNorthern, are believed to have raised between £7m and £8m against costs including printing, legal bills and sub-underwriting. The takeover bid is costing Trafalgar House £500,000 a week.
Swiss Bank, which last week emerged as a holder of eight per cent of shares in Yorkshire Electricity, is beleived to have covered its position by taking small stakes in other regional electricity companies.
Most of the contracts for differences have expired but two out of three involving Northern Electric remain. It also emerged last week that Swiss Bank has 3.46 per cent of Northern Electric.
Mr Morris said:"We need clarification on the precise dates relating to various contracts." He said that there is little known about contracts for differences and their regulation, adding:"It is a matter for the Stock Exchange to consider whether rules need to be developed."
A spokeswoman for the Stock Exchange said:"We have been looking at all of the circumstances surrounding the bid announcement but we can make no further comment."
The offer document confirms Trafalgar House's intention to force Northern Electric to call an extraordinary general meeting to change the articles of association so that Trafalgar can launch a bid. The articles prevent any single shareholder from holding15 per cent or more of the shares. Northern has so far refused to call an EGM, but Trafalgar House has now obtained the backing of holders of 10 per cent of the shares, which forces the company's hand.
It also contains a guarantee that Trafalgar House will keep Northern Electric's headquarters in Newcastle upon Tyne, to show commitment to the region. Trafalgar also proposes a £20 rebate to Northern Electric customers in the first quarter and says that in future customers will benefit from efficiency savings.
Mr Morris said attacked the offer as "wholly inadequate". "The document contains no credible commercial rationale for the bid. It does not explain the apparent financial rationale, including the use the bidder intends to make of Northern Electric's future profits, cash flow and investment in National Grid Holdings to recover, at the taxpayers expense, Trafalgar House's capital and trading losses and other tax write-offs," he said.
Mr Morris called on shareholders to take no action. He said that Trafalgar House service record is "lamentable" as highlighted by the recent debacle over its flagship QE2 luxury liner. He warned:"The rewards enjoyed by Northern Electric's shareholders and customers from our commitment to high standards of efficiency quality and service should not be jeopardised by the dictates of a financially challenged conglomerate, controlled by an offshore minority shareholder."Reuse content