US shareholder forces EGM at Northern

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The Independent Online

Industrial Correspondent

Wyser-Pratte, a US shareholder in Northern Electric, has gathered enough support to enforce demands for an extraordinary meeting. The meeting will consider a potential new bid for the company by Trafalgar House, whose previous £1.2bn offer collapsed last month.

The American firm of arbitrageurs said that shareholders owning at least 10 per cent of Northern are backing demands for an extraordinary meeting and that a requisition is likely to be prepared this week.

Guy Wyser-Pratte, the firm's president, said he was appalled that Northern had refused even to talk to Trafalgar House, whose chief executive is Nigel Rich. In addition to asking for the meeting, Mr Wyser-Pratte plans to nominate an additional director "in order to protect the interests of shareholders".

Trafalgar House proposed a new bid at £9.50 for each Northern share after the lapse of the earlier £11 per share offer. Northern's shares closed down 4p last night at £7.59.

The new bid cannot go ahead until next year without Northern's agreement - and until now the electricity company has said it will not consider any offer while there is uncertainty over electricity prices, which are now once more being reviewed by the regulator. That decision could, however, be overturned by shareholders at the extraordinary meeting.

Relations between Wyser-Pratte and Northern Electric sank to new depths last week. Northern threatened to sue the US firm for defamation after Mr Wyser-Pratte suggested that the directors had put their own interests before those of the shareholders and acted in a way that put them in breach of their duty.

David Morris, chairman of Northern, said that if the allegations were repeated, the directors would have little option but to take legal action - but he did not respond to the requests to open negotiations with Trafalgar House or permit a new bid.

Mr Wyser- Pratte is frustrated at the unwillingness among some British institutions to make their views known. Although some UK institutions have supported his call for an extraordinary meeting, he feels that many more privately back the move.