E.ON has dropped its all cash bid for UK generator Scottish Power first announced on 5 September and at a buyout price of 570p per share ($9.8/share).

The withdrawal was followed by a statement from the board of Scottish Power saying: “ScottishPower considers [the cash offer from E.ON] would not have been received by shareholders earlier than the Spring of 2007, when any transaction was expected to complete. The board, which received independent financial advice from Morgan Stanley and UBS, concluded that this proposal did not reflect the fair value of ScottishPower and its prospects.” E.ON confirmed that it will not be making an offer and that discussions with Scottish Power have ceased.

In addition to the cash offer from E.ON, Scottish Power shareholders would have received ordinary dividends in accordance with Scottish Power’s existing dividend policy during the period until closing.

E.ON’s proposal also required the disposal of PacifiCorp to MidAmerican to close prior to the acquisition along with regulatory approvals and a unanimous recommendation by the Scottish Power board.

E.ON’s proposal valued the Scottish Power’s share capital at approximately £11.3 billion ($19.4 billion). However, on 10 November ScottishPower published its interim results for the six months to 30 September 2005 showing operating profits up 40%, profit before tax up 45% and earnings per share up 64%.