The Financial week ahead – Newswatch: Giants battle over Welsh

Embattled Welsh multi-utility, Hyder, has become the battleground for takeover moves by US utility giant Western Power Distribution and Japanese bank Nomura, writes Jerry Frank. The predators are fighting it out over the Welsh group, which owns the former Welsh Water and electricity company Swalec, with Western putting down #464m on the bidding table, upping the #402m laid down by Nomura. Last month Hyder shareholders, who will learn the company’s results today, were urged not to accept the rival bids for the water and electricity utility until competition and regulatory authorities had cleared concerns. Western is jointly owned by US group Southern Company, whose scale of European business means the deal could fall under the jurisdiction of Brussels. As the stakes rise, fears that a Western victory could spell job losses has prompted Welsh first secretary Rhodri Morgan to lobby trade secretary Stephen Byers to intervene and ‘repatriate’ the Western bid from the European Commission into a UK competition issue. Welsh politicians favour Nomura who would keep the group intact, while Western has its eyes on the group’s electricity supply business and would sell the water business to United Utilities. Western has also hatched plans to sell the Welsh Water subsidiary from private ownership into a mutual structure, which will make the customer the owner. Accountant duo Graham Hawker, chief executive, and Paul Twamley, group FD, are awaiting the outcome for the company, which was recently described as ‘a basket case’. Hawker has over 30 years of finance experience at Welsh Water, while Twamley has worked as group finance director since joining from Coopers & Lybrand in 1992. Hawker is also chairman of the regional economic powerbroker, the Welsh Development Agency. The British merger regulator has approved Nomura’s offer, and Western is awaiting clearance from the EC by July 14.

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