PacifiCorp last week upped its bid for Britain’s The Energy Group to $12.62 per ordinary share, a 10% increase over the original bid made June 13. And FERC gave its blessing to the sale of assets held by Citizens Power, an Energy Group subsidiary. The asset sale is necessary for PacifiCorp’s bid to go forward.

PacifiCorp’s new proposed deal is valued at $10.7 billion, including the purchase of 521 million shares of equity and the assumption of $4.1 billion of The Energy Group’s gross debt. Proceeds for the acquisition will come from $1.8 billion in cash, raised through asset sales that have been occurring since PacifiCorp’s original bid, and $4.8 billion in borrowings.

The bid increase follows the announcement of two potential competing bids for The Energy Group, one from Texas Utilities and one from a unit of Japan’s Nomura Securities. PacifiCorp’s original bid lapsed after it was referred to Britain’s Monopolies and Mergers Commission. Because the U.K. government cleared the transaction in December, it is not conditional upon further U.K. regulatory approvals.

In the U.S., the Federal Energy Regulatory Commission (FERC) issued an order approving the sale of the jurisdictional assets of Citizens Power to Lehman Brothers Holdings. Assets being sold include FERC tariffs, contracts and associated records. Energy Group will retain the Citizens Power name and employees. Citizens Power specializes in energy marketing and non-utility generator contract restructuring.

Also, PacifiCorp and Energy Group agreed with Federal Trade Commission (FTC) staff on the form of a consent decree that will require divestiture of two mines owned by Peabody, an Energy Group subsidiary. The consent order awaits FTC approval.

Joe Fisher, Houston

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