UK utility ScottishPower has been busy building its defenses against a mooted GBP10 billion-plus takeover offer from German energy giant E.ON. Reports in the UK press suggest that E.ON may have to pay up to 700 pence per share to get is hands on the gas and electricity supplier.

The Independent newspaper has reported that ScottishPower’s board is determined not to allow E.ON to acquire the group for a price that it views as undervaluing the company.

This could equate to an asking price of some GBP12-13 billion – something that is unlikely to please E.ON, as the German firm has already promised shareholders that any future acquisitions will be earnings enhancing within a year. This is likely to deter E.ON from paying a significant premium to get ScottishPower.

The Glasgow-based utility insists that, for the time being, it is ‘business as usual’. In a trading statement released on October 10, ScottishPower said its UK business has performed strongly in Q2, and reaffirmed its forecasts for the full year.

Its disposal of the PacifiCorp business in the US is ahead of schedule as a result of changes to US law, meaning that it should be completed comfortably within the expected 12-18 month timeframe.