International Power in GDF merger talks
BRITISH energy firm International Power (IP) confirmed it had revived merger talks with GDF Energy yesterday, sending its share price soaring.
The companies have restarted long-running talks over France’s GDF buying up new shares in IP. Previous talks collapsed in January after the firms failed to agree terms.
GDF, already one of the world’s largest utility companies, would become the majority shareholder in an enlarged IP, which would still trade on the London Stock Exchange. It would be classed as a reverse takeover under UK rules.
IP’s board said in a 103-page statement yesterday that the potential tie-up of some operations outside of Europe “warrants consideration given the strategic rationale and potential for synergies as a result of the combination”.
Neither company has mentioned a price, but reports have suggested a deal could be worth £6.4bn. IP was keen to stress yesterday the talks are at a very preliminary stage.
A prospectus will be issued in due course, and any deal is still subject to IP shareholder approval.
The market signalled its approval yesterday as shares jumped 10.5 per cent to 350.3p.
Analysts gave a cautious welcome to the news.
Tina Cook from Charles Stanley said any deal could face regulatory hurdles, but gave an “accumulate” recommendation on IP’s shares.
SIMON ROBEY
HEAD OF UK,
MORGAN STANLEY
AN INTERNATIONAL team has been assembled to advise on the merger talks. Big-hitters from JP Morgan Cazenove, Morgan Stanley and Nomura are on hand to advise International Power, among them City stalwart Simon Robey.
Robey, 49, is head of UK at Morgan Stanley, most recently acting for broadcast giant Sky after News International moved to buy the shares in the broadcaster it did not already own.
He also worked with chocolate maker Cadbury in its £11.5bn sale to US rival Kraft in January. He helped Marks & Spencer fight off the advances of the retail billionaire Sir Philip Green in 2004.
Robey was a choral scholar at Magdalen College, Oxford. He trained as a bass-baritone and almost became an opera singer. He is the chairman of the Royal Opera House and has held a season ticket at Arsenal for more than 20 years.
Robey is joined by Alastair Cochran, a managing director in Morgan Stanley’s corporate broking team, and head of UK investment banking Simon Smith. Other advisers for IP include Edmund Ryers and Mark Breuer at JP Morgan Cazenove, and William Vereker, Adrian Mee and Jason Hutchings at Nomura.
GDF has taken on advisers at NM Rothschild, Goldman Sachs and Lazard.