Hanson may seek deal with Eastern Group
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.Hanson, the Anglo-American group, is thought to be working on an agreed pounds 2bn-plus take-over of Eastern Group, the UK's second largest electricity company, writes Russell Hotten.
A move by Hanson for a regional electricity company had long been expected, though Southern and Yorkshire were tipped as the most likely targets.
Speculation was growing over the weekend that Hanson's advisers NM Rothschild and Hoare Govett were working on an agreed deal to avoid running into complications with the electricity regulator, Professor Stephen Littlechild.
Hanson refused to comment yesterday, but executives have in the past hinted that they were preparing for a large takeover. A deal for Eastern would be Hanson's first large bid since it bought Quantum, the United States chemical group, in 1993.
Earlier this year, Hanson hived off 34 of its non-core American businesses into US Industries. The move, which netted Hanson about pounds 850m, was widely seen as a deck-clearing exercise in readiness for another takeover move.
Eastern, valued at pounds 1.75bn, stands behind Southern Electricity, valued at pounds 1.89bn, as the largest company in the sector. Eastern could not be contacted last night, and a Southern spokesman declined to discuss suggestions it had also been approached by Hanson.
Southern has said in the past that it is interested in talking to potential partners, though this was thought to mean other electricity companies rather than conglomerates such as Hanson or Tomkins.
Eastern is seen as one of the better-run utilities, and profits of pounds 203.5m last year are expected to rise sharply this year.
John Devaney, Eastern's chief executive, is a highly regarded and ambitious businessman and could be given a place on the Hanson board as part of any takeover.
The electricity sector's enormous profitability makes further takeovers highly likely, though Trafalgar House, the UK industrial group, is said to be having second thoughts about reviving its offer for Northern Electric. "Whether Trafalgar will bid is too close to call,'' said one observer.
Manweb's annual meeting tomorrow is expected to be dominated by the hostile bid from Scottish Power. And Southern Western Electricity is in the throes of a contested pounds 1bn bid from the US group Southern Company.
The US utilities Pacific Gas & Electric and Houston Light & Power are rumoured to be potential white knights for Sweb.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments