Grid directors net pounds 2m in flotation

MARY FAGAN

Industrial Correspondent

Directors of the National Grid Company saw the value of their shares and share options hit pounds 2m yesterday after the flotation of the Grid went ahead. The shares opened at 209p and closed at 209.5p, valuing the company at about pounds 3.5bn.

The main beneficiaries include David Jefferies, chairman, whose shares alone are worth about pounds 780,000, and John Uttley, the finance director. Directors also benefit from one-off dividend payments related to the flotation although Mr Uttley has said he will give about pounds 50,000 to charity.

The price of the shares disappointed some City analysts who had expected it to reach as much as 220p. At one point last week shares in the grey market touched 230p. The view was that the price was hit by the decision by North West Water and Scottish Power to place around 180 million shares, to raise about pounds 370m. The stakes were acquired through the takeovers of Norweb and Manweb, the regional electricity firms.

Substantial stakes are still held by Hanson, through its acquisition of Eastern Electricity, and by Southern Electric International of the US, which bought South Western Electricity. Both Hanson and SEI wanted to retain a Grid stake but were given a year to dispose of the shares by Tim Eggar, minister for industry and energy.

More than a million private shareholders receive shares in the Grid through the demerger of stakes by regional firms. Shareholders in Northern Electric also benefit from the special dividend linked to the flotation, offered when it wasfighting a Trafalgar House bid.

Shares placed, page 23