Midlands is latest to buy back shares

MIDLANDS Electricity yesterday joined the string of privatised electricity companies buying back their shares when it splashed out pounds 153.4m on repurchasing 10 per cent of the group, writes Martin Flanagan.

It has bought 21.16 million shares at 725p each compared with a market price yesterday of 713p, up 25p.

The move followed shareholder approval at the annual meeting in August. A company spokesman said the buyback would boost earnings per share and help to create a progressive dividend policy.

Yesterday's transaction is in harmony with similar moves by many of the other 12 regional electricity distributors.

They include Northern Electric, Manweb, Norweb, South Wales Electicity and Eastern Electricity. PowerGen, the smaller of the two power generators, also bought back 0.6 per cent of its shares this year.

Nigel Hawkins, utilities analyst at Hoare Govett, said: 'Companies repurchasing shares can be seen as unexciting, but we like it. Given the utilities' record in diversification, we would prefer seeing them do this with the money than investing it in Fiji.'