Midlands deal prompts bid speculation
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.SPECULATION THAT Midlands Electricity is preparing a bid either for another regional electricity company or a water supplier intensified yesterday after ownership of the group changed hands in a pounds 452m deal involving its two US parent companies.
GPU, the New Jersey-based utility which owns half of Midlands, has bought out the other 50 per cent stake owned by the Cincinnati-based Cinergy in a deal valuing Midlands at just under pounds 2bn.
The two US companies bought Midlands for pounds 1.7bn in 1996 through a joint venture called Avon Energy. Since then, however, there has been growing friction between GPU and Cinergy about the strategic direction of Midlands. GPU has been much keener to expand its interests in the UK in electricity distribution and water whereas Cinergy was more interested in growing Midlands' electricity supply business.
Earlier this year, the two companies agreed to sell Midlands' supply business to National Power for pounds 180m, in what represented a victory for GPU's preferred strategy. Now that GPU has acquired 100 per cent control, analysts say there is little standing in the way of its bidding either for another electricity distribution business or a water company.
Mike Hughes, Midlands' chief executive, confirmed last month that it would like to buy a water company. Its favoured target is Severn Trent, which is based in the same part of the country.
Vic Cocker, the chief executive of Severn, is not interested in a merger. However, Severn announced last week that he would be retiring in July next year to be replaced by a former PepsiCo executive, Robert Walker.
Severn Trent shares rose 13p to 1000p.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments