Newspaper article The Evening Standard (London, England)

Centrica Flies as Block on Gazprom Bid Is Ruled Out

Newspaper article The Evening Standard (London, England)

Centrica Flies as Block on Gazprom Bid Is Ruled Out

Article excerpt


BRITAIN'S biggest gas supplier, Centrica, looked like a sitting duck today after the Government ruled out the possibility of blocking any bid from Russia's Gazprom.

Shares of Centrica blazed a path among blue-chips, rising 73/4p to 310p, having briefly touched 3181/2p, as over 34 million shares changed hands - more than treble the usual daily volume. At these levels, the British Gas outfit commands a price tag of [pounds sterling]11.3 billion, well within the financial firepower of the Russian gas giant.

Gazprom first expressed an interest in bidding for Centrica in February, days after saying it wanted to control 20% of the UK gas market, the largest in Europe.

Yesterday's announcement by Prime Minister Tony Blair coincided with a visit to London by Gazprom chief executive Alexander Medvedev, who held talks with Trade Minister Alan Johnson and spoke at the Russian Economic Forum.

The Government believes it should stick with its commitment to make European markets more liberalised. Gazprom has clashed with the EU on plans to deregulate the European gas market which it says would lead to a relaxation of long-term contracts between the Kremlin-run company and some of its biggest customers.

This latest burst of takeover speculation rescued a tired-looking stock market and provided the impetus to carry the FTSE 100 back above 6100 in thin trading. The index rose 25.6 to 6112.2.

Housebuilders ticked better, also buoyed by speculation that another round of consolidation may soon be under way. George Wimpey, up 5p at 5331/2p, and rival Redrow, 2p firmer at 5371/2p, are seen as the most vulnerable. The building sector has contracted rapidly during the past couple of years, with City investors treated to a spate of mergers and takeovers as companies strive to build up dwindling land banks. Persimmon, down 14p at 1339p, paid [pounds sterling]640 million for Westbury towards the end of last year.

Anglo-Australian miner BHP Billiton, 21/2p cheaper at 1167p, said in a quarterly production report that it is struggling to find enough manpower and equipment to meet the surging demand for commodities, and this is pushing up costs. …

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