SEI has back-up takeover plan
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Southern Electric International of the US is expected to target another regional electricity company should its pounds 1bn bid for South Western Electricity fail.
The group has been waiting for 18 months to make its move into the UK market, and is prepared to launch a fresh offensive if initial plans fall through.
A source in the company said SEI remains confident of taking over Sweb, which would represent its biggest acquisition to date. He said the big attractions for SEI include the regulatory regime in Britain and the political stability - factors which would hold in the case of other regional firms. Tom Boren, president and chief executive officer, said when he launched the bid that the UK would be an important plank in its international expansion plans.
Sweb, which has attacked the pounds 9-a-share offer as a "sighting shot", is not expected to launch its final defence against the bid for about two weeks.
The company has hinted at a package of sweeteners for share holders that could be worth as much as the pounds 5-a-share offered by Northern Electric in of an earlier bid by Trafalgar House. It is thought that Sweb is prepared to gear itself substantially to finance the package. The takeover vehicle being established by SEI would in any case have a gearing of 120 per cent. Sweb's share price rose 4p yesterday to 907p.
Speculation of further bids in the sector continued to focus on London Electricity, with shares in the company rising 15p to 789p. Rumoured predators include another large US utility, Pacific Gas and Electric, as well as RWE, a German group that includes the country's biggest electrical utility. London, which holds its AGM today, declined to comment.
Separately, Eastern Electricity used its AGM to call for shareholder support for the pounds 2.5bn recommended offer by Hanson, the industrial conglomerate.
James Smith, chairman, said: "We believe the price is very satisfactory and in the interests of shareholders."
He also attacked the recent review of the company's distribution charges by the watchdog, Professor Stephen Littlechild, as "unjustified".
Eastern's shares rose 6p to 925p yesterday while those in Manweb, which is fighting a pounds 1bn bid by Scottish Power, rose 5p to 872p. Shares in Northern Electric, awaiting a possible renewed attack by Trafalgar House, were also up 5p at 894p. Under Takeover Panel rules, Trafalgar House must make its intentions clear by next Thursday. The group lapsed an pounds 11-a-share offer in March and was subsequently prevented by Northern's board from coming back at pounds 9.50 a share.
Some City analysts believe Hanson's pounds 9.75-a-share offer for Eastern Electricity has set a benchmark that Trafalgar will be unwilling to match. There is also some nervousness among City analysts over a potential reference of the sector to the Monopolies and Mergers Commission.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments