Bid sparks Scottish Power surge:
A bidding war for Scottish Power looks set to catch fire after the electricity giant admitted it had received a multibillion-pound takeover approach. City speculation on the bidder immediately fell on RWE, the German powerhouse that already owns npower in the UK, and Vattenfall, the Swedish-based fourth-biggest generator of electricity in Europe - believed to have been eyeing the British energy market for some time. Russian behemoth Gazprom is also known to be stalking the UK market. Dealers, however, also claimed Scottish Power could yet go for a white-knight merger with its old arch-rival Scottish and Southern Energy to form a £25bn British champion. Shares in Scottish Power were electric in morning trading, soaring almost 20% at one stage, before the company put out a noon statement admitting it had received an approach that may or may not lead to an offer. Wilder speculation has suggested a bid could come in at 900p a share, giving the group a market value of £13.4bn. But analysts believe a sum-of-the-parts valuation of Scot-Power's British generation, transmission and supply businesses factoring in a takeover premium and the 'hidden gem' value of its state-subsidised US windpower business - is closer to 750p a share. After ScotPower's confirmation of the approach, its shares traded up 70p at 741½p. Industry insiders believe the recent surge in Scot-Power's stock - up more than 40% since the start of the summer - puts it in a better position to pull off a merger with the larger SSE. SSE - whose shares also spiked today, up 4% or 57p at 1403p, valuing it at £12bn - would previously have had too large a stake in a tie-up between the two. E.On, the German group that trades in the UK as Powergen, tabled a 570p-a-share takeover offer for ScotPower 12 months ago, but walked away when the then chief executive Ian Russell refused to negotiate. E.On, though, is now being all but ruled out as a bidder as it is currently in the middle of a contentious €37bn (£25bn) takeover of Spanish power group Endesa. 9.11.06