Executives at SSE have been criticised after blaming the government’s energy price cap for derailing the merger of its supply business with Npower, with City analysts describing the situation as a “shambles”. Shares in the FTSE 100 company fell by more than 2.5 per cent yesterday after City analysts questioned how SSE apparently had been caught out by Theresa May’s energy policy. SSE surprised investors on Thursday by warning that it needed to revise the terms of the proposed Npower deal as “recent market developments”, including the price cap, could prevent the merged supplier gaining an “appropriate” credit rating. It disappointed shareholders by cutting its profit outlook twice this year and analysts at Bernstein warned that the latest news was “another blow to SSE management’s credibility” as the company prepares to report half-year results next week.
Times 10th Nov 2018 read more »
The decision by SSE and Npower to delay the planned merger of their retail businesses was denounced as a “shambles” by industry analysts on Friday, saying it had thrown the whole premise of the combination into doubt. The two energy retailers, which have spent the past year planning a merger to create a new London-listed provider, announced late on Thursday they needed to delay the arrangement, blaming the UK government’s introduction of a price cap on certain household energy bills. But industry executives and sector analysts said it suggested a failure on the part of management of both London-listed SSE and Npower, owned by Germany’s Innogy, to anticipate the affect of the widely expected intervention in the market. Both companies cited the ceiling on default tariffs, which was finalised by the UK government this week, as the primary reason for the delay. But analysts said neither the cap itself nor its level should have come as a surprise, adding that plans to introduce it were flagged by the prime minister more than a year ago and just before the merger was announced in November 2017.
FT 9th Nov 2018 read more »