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RealTime IT News

Scottish Power Surges Amid Flotation Rumours

Shares in Scottish Power rose amid speculation that the company will float its Scottish Telecom subsidiary.

Scottish Telecom boosted its profits to £10 million (US$16 million) last year, helped in part by the strong performance of Demon Internet, the UK's original low-cost Internet service.

Today, Scottish Power also delivered a letter to its shareholders, explaining the proposed merger with PacifiCorp. Shareholders were told that a new holding company for the Scottish Power group will be established -- a clear sign that dramatic reorganisation is on its way.

The value of Scottish Telecom is judged in the UK's financial press to be somewhere between £1 billion (US$1.6 billion) and £1.5 billion (US$2.45 billion). However, it is unlikely that the whole company would be sold. The most likely scenario is that 25-30 percent will be offered in the autumn this year.

Before falling back to 557p, Scottish Power's share price reached 584p on Friday, 7 May, up 42p since Wednesday.