They say it would make strategic sense if the two companies – in which the States have majority interests – became one.
The JEC have yet to put a bid together and have not put a price on Waterworks, which has a share value of only just over £1 million but owns considerable land and assets and makes an annual profit of around £3 million.After today’s announcement of the proposed acquisition, the electricity company will now pore through the water company’s books to prepare the bid.
The JEC say a takeover will ensure that the water utility remains in local hands and will help to safeguard future supplies.It would also mean job losses at Waterworks.
Staff there were informed of the potential bid this morning and their chairman, David Norman, said that the news was greeted with surprise and concern.
‘They are human beings, they would have some anxieties,’ he said.It is clear that the Waterworks Company have not invited, nor expected, the bid and the first Mr Norman knew about it was at a meeting yesterday with JEC chairman Derek Maltwood, JEC managing director Mike Liston and water company chief engineer Howard Snowden.Mr Norman said that until the bid was actually forthcoming, he was not in a position to comment about its merits.
The JEC say there are ‘synergies’ between the two companies but they will not say whether they expect water bills to come down as a result of a takeover.Mr Liston said the company would be keen to put more homes on meters and encourage water conservation.
He also said it was likely that water and electricity consumers would get a single bill in future.The Finance and Economics Committee have given their approval for the bid to be prepared, although they are taking a ‘neutral’ position on the merits of it.Finance act on behalf of the States as major shareholders in both companies and in theory there would be no requirement for the bid to go to the States for approval, although it seems unlikely that the House would not be given an opportunity to debate the takeover.Finance president Senator Terry Le Sueur said: ‘We will be taking independent legal and professional advice to ensure that it acts at all times in a responsible and ethical manner, recognising also the obligations owed to the public as consumers of water and electricity.
‘ An announcement was made to the London Stock Exchange this morning, as the JEC is a floated company.