A rant from MD, CC's UK scribe...

If ever one wanted to blaspheme, this is one of those moments. Scottish Power - once a small company focussed on generation of hydroelectric power in the Scottish Highlands - went on a spree. The rocket scientists who work there (not many, it has to be said) latched onto the idea of buying a larger company in the US to give them "breadth, diversify their earnings and to move away from the regulated UK market" which was paying for it all. Paid top dollar and then suffered the Mother and Father of all melt downs when wholesale prices in the US collapsed.

Not content with this destruction of capital and despite things being on the (eventual) mend, they decided to flog the business last week on the grounds that they would have to spend $1bn annually (£600m in real money) for the next five years investing in the business.

Now, call me an old cynic, but the purchaser is Mid-American Energy, a company controlled by one Warren Buffet and a chap who knows a bargain when he sees one. The US has learnt from the debacle of a few years ago that you can't let the lights go out. I believe he's got a bargain and the prats (yes, that's right the prats) at Scottish Power have been stiffed. Mr Buffet doesn't get it right all of the time but he does better than most and I'm betting on him not having given the Scottish Power suckers an even break.

Still, maybe there will be a change of heart - regulatory approval will take a while as in the unregulated US some 14 authorities will have to give their nod.

Bookmark and Share

0 comments

Related Posts with Thumbnails