ScottishPower Shares Surge Amid Speculation of £12 Billion Offer

Strategic Insights -

ScottishPower's shares temporarily surged yesterday, fuelled by speculation that a Spanish company, Iberdrola, was poised to make a £12 billion offer for the Glasgow-based energy firm. Analysts speculated that Iberdrola's move might spark interest from other parties, including Gazprom of Russia and France's EDF. The takeover speculation drove ScottishPower's shares to 760p, valuing the company at over £11 billion, although the shares later slipped to 734p. A statement from ScottishPower confirmed receipt of an approach, but declined to name the party or parties involved.

Key Takeaways:

  • Iberdrola, Spain's second-largest energy company, is reportedly considering an £12 billion bid for ScottishPower, which includes five million energy customers and generation capacity.
  • The proposed takeover would involve Iberdrola teaming up with a private equity fund, which would take on PPM, ScottishPower's US renewable energy and gas storage arm.
  • ScottishPower's US and Latin American operations contributed significantly to the company's net profits of £831.4 million for the nine months ending September.
  • The company's strategic plan for 2007 and 2009 aims to "take advantage of profitable business opportunities abroad, especially in Europe and the United States."
  • Iberdrola's acquisition of ScottishPower would be the latest in a series of takeover moves by Spanish companies in the UK, including BAA, Abbey National, and O2.

Statistics:

  • ScottishPower's shares briefly reached 760p, valuing the company at over £11 billion.
  • The shares later slipped to 734p, just 1% above the opening price.
  • ScottishPower's net profits for the nine months to September were £831.4 million, representing a 26% increase.
  • Russian energy giant Gazprom and French utility EDF may also be interested in acquiring ScottishPower.

Sources:

  • "ScottishPower shares take a temporary surge amid takeover speculation" (The Scotsman)
  • "Iberdrola say they will continue to assess alternative investment options" (Spanish stock exchange statement, as reported by The Scotsman)
  • "ScottishPower reports 26% rise in profits" (The Scotsman)