OUTLOOK: No spark to the power sell-off

The £4bn sale of National Power and PowerGen is finally under way with all the familiar bells, whistles and razzmatazz. On the face of it, there is not a lot to differentiate this campaign from previous ones. Share shops and discounts for private investors are now commonplace in government share issues. So too is price-setting by an international process of bidding by institutions.

The advertising may be better than the disastrous Inspector Morose campaign launched for BT3, but in other respects it looks like being an equally unexciting investment prospect. A market price for the shares already exists. Unlike the original sale in 1991, the companies have a track record already reflected in the price. The upshot is that this time round the generators will not provide the guaranteed privatisation bonanza of yesteryear. If BT3 is anthying to go by, investors will lose money in the short to medium term.

The fact that the Government agreed to allow National Power and PowerGen to buy up to 8 per cent of their respective shares as part of the international offer suggests there was a fear that, otherwise, it would have been hard to get the thing away.

The Government's advisers strongly reject this notion. They argue that the move is good because it will enhance earnings per share. It does nevertheless provide a cushion, should demand not be all that the Treasury might wish.

There is also a hefty 40 per cent set aside for private investors, and more if demand from the UK public is very strong. Some might be put off by the high expected minimum investment of about £1,000 The reason given for this is that the package sold to the public will contain shares in both companies.

It nevertheless suggests that, in the public offer at least, the Government is more interested this time round in deeper rather than wider share ownership.