IT SURELY won't be long before the tabloids start reaching for the Costa Fortune headlines if ScottishPower succumbs to a £12bn bid from Spanish giant Iberdrola.
This looks like a full price and the Spaniards will probably need help, almost certainly from private equity partners, to put it together. At the suggested 800p a share it is more generous than German firm Eon is paying for Spain's biggest energy fir
m Endesa. The regulator Ofgem has already warned any buyer not to think it can squeeze cash out of ScottishPower by denying it investment.
Iberdrola was not among the early suspects when ScottishPower confirmed it had received an approach. Eon, fellow German utility RWE and Edf of France were thought more likely suitors.
Those close to Iberdrola expressed surprise at the firm's move as it had given no hints at being acquisitive. It was thought to be a defensive measure prompted at least in part by Eon's unpopular raid on Endesa, which signalled to others that it was a case of eat or be eaten. The sector throughout Europe is consolidating, ScottishPower is one of the few tempting morsels left, and through its PPM Energy subsidiary the Glasgow utility has a thriving wind power business, probably the real target for the Spaniards, who are also big in renewables.
For the consumer a merger might not be such bad news as bigger utility companies will have greater bargaining power against the likes of the Russian gas owners. Should ScottishPower be snapped up in the rush, attention will quickly turn to its neighbour in Perth. Rumours of merger talks between ScottishPower and Scottish & Southern Energy are said to be wide of the mark but without such a deal it looks like both are vulnerable in the newly constituted European energy market.
Superschool lesson
ANGUS Laing, head of Glasgow Business School, doesn't hold back when he describes Scottish schools as "underperforming" and says he wants to put his at the top of the Scottish pile. But is he aiming high enough? Why not top in the UK? A champion of Europe?
He says he needs to be realistic and to turn a failed venture into the best in Scotland would be satisfaction enough.
He raises issues over quality standards and levels of expectation and it must be a concern that plans for a Scottish 'superschool' - first revealed in Scotland on Sunday last year - appear to be coming under pressure. Getting potential clients to commit to the project long-term is proving a problem. That's a pity and we must hope that it's not symptomatic of Scotland getting above itself. Confidence and ambition are one thing but, as Laing says, there are times when it pays to be realistic. However, if being realistic means lowering Scotland's sights then we must hope the superschool backers prove him wrong.
NTL folly
RICHARD Branson is keen to get into the television business but surely he can see the folly of the move by NTL, in which he is the biggest shareholder, to merge with ITV. This is not so much a merger as a collision of two ailing organisations.
There is much talk of Stephen Carter, the former NTL boss, now being hot favourite to run both companies, though it sounds more like a poisoned chalice than a cause for celebration. Combining ITV's declining advertising and viewers with NTL's reputation for poor customer service and retreating subscriber numbers is hardly a promising outlook for any new chief executive.
If this is about tying ITV's content with NTL's cable then there are certainly other examples of it being made to work: Time Warner in America does it, while BSkyB combines content with satellite.
But the worry must be NTL's inconspicuous success at integrating a decade's worth of acquisitions and the prospect of burdening a company that flirted with extinction with even more debt. ITV surely deserves better.
Crest Nicholson
SIR Tom Hunter's latest big money deal, first disclosed here in August, would bring housebuilder Crest Nicholson into the West Coast Capital-Bank of Scotland portfolio. But the bank's shareholders are getting twitchy at the prices now being paid. The 585p a share offer, valuing Crest Nicholson at £660m, has been knocked back and there is no guarantee shareholders will want to go too much higher.
But Hunter told us three months ago he was eyeing a £700m deal and that's how much Crest Nicholson is now worth after a lift in the share price on Friday. Expect another tilt from the Ayrshire tycoon.
Would you welcome a foreign owner for ScottishPower? letters_sos@scotlandonsunday.com
