Scottish Power rejects EON approaches

22 November 2005 - Scottish Power said today it had called of discussions with E.ON having rejected a bid offer from the German utility

The company said it had taken independent financial advice from Morgan Stanley and UBS who concluded that Eon's offers did not reflect fair value and that anyway shareholders would not see any money until 2007. Chief executive Ian Russell said that the price did not reflect what he called "the significant opportunities to deliver further strong growth".

EON had tabled several offers since declaring its interest in Scottish Power in September the latest of which on November 18 was for 570p a share plus normal dividend payments. However, there would have been conditions around the payout of £2.5bn ($4.3bn) to shareholders from the sale of the US generation business Pacificorp.

Scottish Power also announced a revised dividend policy that will bring a fourth-quarter payout of 9.4p a share, against 7.65p last time, resulting in an 11.1 per cent increase in the annual total to 25p. For the next two years the target will be dividend growth of at least 7 per cent.

In response to EON's interest Scottish Power announced a board shake up in early September with corporate restructuring and a set of cost reduction measures.

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