WPD tops Nomura's agreed Hyder offer

Just when the protracted takeover battle for Hyder seemed over, Western Power Distribution, a US utility joint venture , yesterday announced an increased bid for the Welsh power and electricity utility.

Just when the protracted takeover battle for Hyder seemed over, Western Power Distribution, a US utility joint venture , yesterday announced an increased bid for the Welsh power and electricity utility.

WPD's terms topped a revised £495m offer for Hyder from Nomura, the Japanese bank, that was recommended by Hyder's board just yesterday morning. Nomura's latest move saw it raise its offer from 260p to 320p a share, ahead of the 300p previously offered by WPD.

The new offer from WPD, at 340p a share or £526m, allows it to withdraw if it fails to gain regulatory clearance from the Department of Trade and Industry.

WPD said its new offer was justified by a Hyder balance sheet shown in last month's results to be in better shape than expected. Hyder shares were just 189.25p on 27 March, the day before it announced it was in talks. Yesterday the shares closed up 24p at 347p.

It is thought Hyder will not consider recommending the WPD offer, despite it now being the highest on the table, until the DTI clears it. It would have to pay a £5m break-fee to Nomura for any change of allegiance.

The DTI has given no timetable for its decision. Nomura, through bid vehicle St David Capital, has already gained regulatory clearance.

The recommendation of Nomura also spelt the end of the scheme being explored by the Hyder board, which would have seen the company split up through a takeover of the water assets by Glas Cymru, a newly-formed Welsh company. A condition of the Nomura offer was that this option is dropped.

Philip Hollobone, an analyst at WestLB Panmure, said that Hyder's assets could justify a price of up to 400p a share.