US utility said to eye London Electricity
The Labour Party has stepped up demands for takeovers of electricity firms to be referred to the Monopolies and Mergers Commission amid growing speculation that London Electricity will be the bid target of a large US utility.
Shares in London rose by 29p to 774p as the takeover rumours reached fever pitch, valuing the company at pounds 1.5bn. Three regional companies are already the subject of acquisition drives: South Western Electricity is fighting a hostile pounds 1bn bid by Southern Electric International (SEI) of the US, Manweb is trying to fend off Scottish Power and Eastern Electricity has agreed a pounds 2.5bn offer by the industrial conglomerate Hanson.
There was speculation that London was being eyed by Pacific Gas and Light, a large power group based on the US west coast. Pacific is also thought to have looked at Sweb with a view to becoming a white knight.
According to one American investor in the UK electricity sector: "With SEI moving into the British scene, it has become something of a vogue."
Brian Wilson, shadow trade and industry minister, has written to Ian Lang, President of the Board of Trade, demanding that the MMC become involved. He said in the letter: "This wave of takeover and merger bids poses a crucial test of whether you are prepared to offer even minimal protection for consumers and employees.
"It is quite misleading to suggest that this is only a test case for the regulator (Professor Stephen Littlechild), who has not, in any case, inspired a great deal of confidence. It is a political decision, which lies with you, as to whether or not these bids are subjected to the kind of scrutiny they merit on a case-by-case basis."
Mr Wilson said the bid for Manweb by Scottish Power - which generates electricity and distributes and sells it to consumers - gives rise to particular concern. Manweb's shares fell by a penny to 867p, compared with the cash offer of 915p, while Scottish Power rose by 2p to 318p. Shares in Sweb rose by 4p to 903p, above SEI's cash bid of pounds 9.
Professor Littlechild added to the debate yesterday by proposing constraints on regional firms that wish to lift the 15 per cent limit on the amount of electricity they generate. He said any extra power generated by a regional firm should not be sold direct to customers within the franchise area. If Scottish Power wins its bid for Manweb it would be above the generating limit and would be limited in its ability to sell power in the area covered by the firm.
Pope Francis: Being an atheist is alright as long as you do good
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Man and woman arrested on suspicion of conspiracy to murder victim of Woolwich machete attack, named as Drummer Lee Rigby
'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
Exclusive: Suspect was inspired by cleric banned from UK after urging followers to behead enemies of Islam
- 1 Pope Francis: Being an atheist is alright as long as you do good
- 2 Man and woman arrested on suspicion of conspiracy to murder victim of Woolwich machete attack, named as Drummer Lee Rigby
- 3 'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
- 4 Archaeologists uncover nearly 5,000 cave paintings in Burgos, Mexico
- 5 Woolwich attack: The EDL will seek to exploit this evil crime for their own evil ends
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.