Sunday, November 06, 2005
ScottishPower: SSE hires CSFB to weigh up GBP 19bn merger; E.ON deal could be announced this week – report
Story: Scottish & Southern Energy, the Perth-based energy group, has hired CSFB to consider a potential merger with ScottishPower, the Sunday Times reported. Sources close to SSE confirmed the appointment, the report said, stating that ScottishPower is believed to be amenable to the merger idea and that such a deal would allay local political concerns regarding foreign takeovers. German energy giant E.ON is in early-stage talks with ScottishPower, which has a market capitalisation just short of GBP 10.5bn (EUR 15.5bn), the piece said, adding that the E.ON deal is believed to be opposed by the Energy Intensive Users Group. The German business is believed to be considering making a bid in excess of 600p per share, making ScottishPower worth GBP 11.2bn, the piece said. According to source cited in a report in The Business, a deal could be signed with E.ON as soon as this week, possibly at ScottishPower’s or E.ON’s results presentations on Thursday. A banker quoted in the piece said that a bid of less than 600p per share would be likely to encourage counterbidding. A Sunday Telegraph report said advisers to the two groups had discussed prices between 610p and 640p last week. It quoted a source who dismissed talk of a 770p bid as “daft”. An item in Scotland on Sunday reported rumours that a private-equity bid from a consortium including Guy Hands has considered making an offer for ScottishPower.
The Times report said that SSE, valued at GBP 8.4bn, has yet to approach ScottishPower formally although, according to a source familiar with the workings of SSE, will step forward if E.ON talks founder. The UK regulator Ofgem may set stringent conditions for a merger, the report said, noting that the combined group would have 70% of the Scottish gas and electricity market. Morgan Stanley and UBS are advising ScottishPower while E.ON has hired Lazard.
The report went on to say that SSE has been rumoured to be a target for Germany’s RWE and Centrica of the UK, although neither is believed to have appointed advisers at this stage.
Source: Sunday Times, Sunday Telegraph, Scotland on Sunday
Value: GBP 11,200m (Estimated SP bid from E.ON)
The Times report said that SSE, valued at GBP 8.4bn, has yet to approach ScottishPower formally although, according to a source familiar with the workings of SSE, will step forward if E.ON talks founder. The UK regulator Ofgem may set stringent conditions for a merger, the report said, noting that the combined group would have 70% of the Scottish gas and electricity market. Morgan Stanley and UBS are advising ScottishPower while E.ON has hired Lazard.
The report went on to say that SSE has been rumoured to be a target for Germany’s RWE and Centrica of the UK, although neither is believed to have appointed advisers at this stage.
Source: Sunday Times, Sunday Telegraph, Scotland on Sunday
Value: GBP 11,200m (Estimated SP bid from E.ON)
