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.