Consumers body hedges bets on Trafalgar's takeover bid

The Consumers Association has intervened in the £1.2bn hostile bid by Trafalgar House for Northern Electric, saying that there is no case to be made against the takeover from a consumer's point of view.

However, the CA also said that if any acquisition would reduce the effectiveness of the regulator, Offer, it should be referred to the Monopolies and Mergers Commission.

In a letter to Offer, the CA said: "There are no obvious changes to the competitive state of the market, or the number of suppliers supplying final consumers. We would, however, be very concerned about any measures which reduced Offer's ability to regulate the industry effectively."

The letter went on to say that the CA would take a "much less favourable line" on the issue of mergers between regional electricity companies, adding: "Acceptances of the case for this takeover would not necessarily be matched by acceptances of the case for other mergers."

The CA's position emerged amidst a continuing war of words between Trafalgar House and Northern Electric. Trafalgar attacked Northern for failing to call an extraordinary general meeting needed to change the company's articles of association to allow thebid to proceed.

Nigel Rich, chief executive of Trafalgar House, said: "It is time for the board of Northern Electric to stop hiding behind technicalities in the company's articles and to give shareholders a proper opportunity to consider Trafalgar House's bid."

Northern, which is under obligation to call an EGM, accused the predator of stamping its corporate feet. "We have already said that we will be convening an EGM and this is what we will do. The shareholders will of course have their say."