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Shares in International Power rise on bid speculation

As we covered yesterday, strong rumours that GDF Suez has approached UK power giant International Power about a potential takeover has seen shares in International Power rise by 9% this morning. While there has been no official confirmation from either company about potential talks about an offer, informed sources believe that informal talks have taken place and International Power may well be open to discussions about a potential takeover.

While no price has been mentioned as yet, shares in International Power touched a 15 month high of £3.51 in early trade. As we mentioned yesterday, a potential takeover of another UK utility company would be highly embarrassing for the UK government especially after Lord Mandelson made a passionate plea for the protection of UK companies from overseas predators. So how will the government react if a bid was forthcoming?

While there is no doubt that the UK government has the right, through the Competition Commission, to potentially block any bid for any UK company which was anti-competitive or against the security of the nation, would there be enough grounds to block a potential takeover of International Power?

Many analysts believe the UK government would have very little grounds to potentially block a takeover bid for the company unless new legislation was introduced to the mix. Will the UK government go down the lines of the French authorities who have given French utilities immunity from takeovers?

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