Scottish Power shares made fresh gains today amid speculation that a Spanish company could be about to offer £12bn (€17.8bn) for the energy supplier.
As well as the reported approach from Bilbao-based Iberdrola, analysts pondered whether the move could flush out interest from other parties, such as Gazprom of Russia or France’s EDF, owner of London Electricity.
The takeover speculation today lifted Scottish Power shares to 760p, making it worth more than £11bn (€16.3bn), but short of the 800p mentioned as a bid price in the City. The stock later slipped to 734p, 1% above its opening price, in a weak market.
A statement from Scottish Power yesterday confirmed that it had received a bid approach, but declined to name the party or parties involved.
Iberdrola, which is Spain’s second-largest energy company, is understood to have teamed up with a private-equity fund with the aim of taking the UK part of the business, which includes five million energy customer accounts as well as generation capacity.
The Financial Times said the private-equity partner would take on PPM, which is Scottish Power’s US renewable energy and gas storage arm.
A spokesman for Iberdrola declined to comment on the company’s position relating to Scottish Power today. It is thought that it has sounded out the Glasgow-based company, but so far stopped short of presenting an offer.
The Times newspaper indicated that the Spanish group was seeking to make itself too big for a European rival to buy it. The company, which employs more than 17,000 people, posted net profits of €1.24bn for the nine months to the end of September, an increase of 26% on a year ago.
Within the results, it outlined greater contribution from international operations, mainly in Latin America, and pointed out its strategic plan for 2007 and 2009 contained a pledge to “take advantage of profitable business opportunities that arise abroad, especially in Europe and the United States”.
Iberdrola is one of the world’s leading providers of wind energy, while it also specialises in running gas-fired combined-cycle power stations.
The interest is the latest in a series of takeover moves in the UK by Spanish companies. BAA was recently bought by Ferrovial while Abbey National is now owned by Banco Santander and O2 is in the hands of Telefónica.