Scottish Power Surges Amid Flotation Rumours
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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.