The Trafalgar House Taveover Bid for Northern Electric: a Case Study in the Impact of Regulatory Intervention

Abstract

Trafalgar House's takeover bid for Northern Electric, the first for a privatised utility, was notable in retrospect for the regulatory intervention which it evoked, although it had not been xpected that regulatory intervention would play a major role in its outcome. This paper presents a case study of this takeover bid. Its principal focus is on the impact of regulatory intervention by the MMC and the Office of Electricity Regulation and it uses event study methodology to assess the impact of this on shareholders' returns.