Windfall for power investors

Top job: International Power chief Phil Cox could run the combined groupMore than 360,000 small shareholders in International Power look set for a windfall after it announces a £14 billion merger with French energy giant GDF Suez this week.

More than 360,000 small shareholders in International Power look set for a windfall after it announces a £14 billion merger with French energy giant GDF Suez this week.The deal, expected to be announced on Tuesday alongside financial results from both groups, will give majority control to GDF, 35 per cent owned by the French government.
Bankers are finalising details this weekend that will include a cash element for shareholders of International Power, formed in 2000 after a demerger from the privatised National Power.
At that time, shares were worth 282p. They ended last week at 366p and analysts suggest the deal could value them at 400p. They say that the cash could be limited to 45p a share as GDF must pay £2 billion of International Power's debt.
Sources say the combined group is likely to be run by International Power chief executive Phil Cox with a Frenchman as chairman.
The new company, to be listed in London, will be formed through a reverse takeover. International Power will issue shares in return for GDF ploughing assets into the venture.
All International Power's 45 plants in Britain, the Middle East, North America and Pakistan will be injected into the group while GDF will contribute assets such as its UK and Turkish stations along with some outside Europe.