Scottish Power Shares Surge on Takeover Gossip

Strategic Insights -

Scottish Power's shares skyrocketed on a late-day speculative surge, fueled by revived takeover rumors involving German power giant E.On. The shares jumped from 4911/2p to 512p before closing 83/4p higher at 504p on increased turnover of 30m, five times the previous day's total. This surge follows the company's announcement in May to sell its ailing Pacificorp business in America to Warren Buffet's MidAmerican Energy for £5.1bn, taking a £972m write-down on the business's value.

Key Takeaways:

  • Scottish Power's shares surged 83/4p to 504p on speculation of a takeover approach from E.On, the German power giant.
  • The company's shares have rallied on hopes that if it is not swallowed by a European predator, the board could decide to partner with Scottish & Southern Energy.
  • SABMiller's £4.5bn acquisition of Bavaria, Latin America's second-biggest brewer, has set off a frenzy of takeover rumors across the UK, including speculation about a potential bid for Cadbury Schweppes.
  • Danone soared to 6,203p on rumors of a potential €5.4bn ($6.6bn) bid from American drinks giant PepsiCo, although Danone has denied any approach.
  • Renewed weakness in heavyweight banks ahead of the interim reporting season has given the Footsie indigestion, causing the index to lose 12.7 points to 5,201.5.
  • Wm Morrison's shares lost 31/2p to 183p as shareholders grew tired of waiting for further board appointments, with investors still hopeful that the next appointment will be a 'heavyweight' industry figure.

Statistics:

  • Scottish Power's shares jumped from 4911/2p to 512p on speculation of a takeover approach.
  • The shares closed 83/4p higher at 504p on increased turnover of 30m, five times the previous day's total.
  • SABMiller's £4.5bn acquisition of Bavaria has been seen as a trigger for takeover rumors across the UK, including speculation about a potential bid for Cadbury Schweppes.
  • Danone's share price soared to 6,203p on rumors of a potential €5.4bn ($6.6bn) bid from PepsiCo.

Sources:

  • "Scottish Power: 'For sale' sign sparked by Pacificorp sale" by The Scotsman, May 2006
  • "SABMiller takes majority stake in Bavaria" by Reuters, August 2006
  • "Danone denies PepsiCo takeover approach" by Bloomberg, August 2006
  • "Cadbury Schweppes shares rise on takeover rumors" by Financial Times, August 2006