They said that the presence of a holding company would make it more difficult to gauge the progress of the integration of East Midlands into the group and make financial reporting less transparent.”Maybe they want to merge in the States, but [the overhaul] will also cloud the view of the acquisition costs and the time it would take to reap the benefits of the East Midlands acquisition,” said one.The decision to set up the holding company comes after Powergen decided to change its year-end from March to December – a move which was attacked by analysts because it would complicate Powergen’s figures.. At the time of the acquisition the Government urged the group to establish a clear distinction between the two sides.However, some City analysts criticised the move. The move would also ensure that Powergen’s generation and supply activities were kept separate, following the pounds 1.9bn purchase of the regional supplier, East Midlands Electricity.The overhaul, which needs to be approved by shareholders, will provide “clear financial and regulatory boundaries around different operating areas,” the company said.Powergen owns power stations and sells electricity to a number of regional companies, including East Midlands. The group is to set up a new holding company with no operating activities, which will oversee its generation, distribution and international businesses.
Sources close to the company said the presence of a holding company would bring Powergen into line with most of its US counterparts.

They said that the restructured group would find it easier to merge or strike a deal with a similarly structured US group.The change would also free up some capital, which could be used for acquisitions or share buybacks, the sources said. As Dell, the huge US direct-sales group, has stormed the market Viglen has struggled to maintain its margins.. LUCASVARITY, the Anglo-US car parts and aerospace group, is to meet major shareholders next week in a bid to quell growing unrest over its plan to move its headquarters and stock market listing from London to New York, writes Francesco Guerrera. The decision to see the UK institutions came as the company rebutted a sharp attack on the move by Sir Brian Pearse, former chairman. The group, formed in 1996 by the merger of Lucas Industries and Varity of the US, said Sir Brian had agreed to the move in April when he was still chairman.
Management is likely to be given a hostile reception by major UK shareholders, including Schroders, Mercury Asset Management, Prudential and Legal & General.The institutions were caught off guard by the announcement last month that LucasVarity would move its headquarters from London to Buffalo and its primary listing to Wall Street. The company said the move would allow it to compete more effectively with US-based rivals. It said the majority of its shareholders were now American.The UK shareholders, led by the Association of British Insurers (ABI), fear the move may harm their investments..

POWERGEN, the electricity group, yesterday surprised the City with an overhaul of its corporate structure which could pave the way for a deal with a US company. A formal offer could be tabled as early as next week.
The news sent Viglen shares soaring to 22.75p, up 8.75p Earlier this week they had fallen to an all-time low of 14p. Viglen’s board recommended shareholders not to take any action.However, it is not clear whether Mr Sugar, who is on holiday aboard his yacht in the Mediterranean, wants to take full control of Viglen. A spokesman said: “He thinks the shares are cheap and a good investment.

City rules dictate he’s got to make a bid, and if people want to sell he’s got to buy them out.”Viglen was demerged from Mr Sugar’s Amstrad group last summer after he broke up the business and returned the parts to shareholders. Mr Sugar had originally wanted to sell part of his stake in Viglen to institutional shareholders, but decided not to when he concluded that the price was too low.Shares in Viglen have fallen sharply since the demerger, when they were valued at almost 90p, as the company has struggled with falling personal computer prices.Viglen assembles PCs from imported parts before shipping them directly to consumers in the UK. For those prepared to take a 10 to 20-year view, IT is the sector to be in as an equity investor.. ALAN SUGAR is to mount a bid for Viglen Technology after the entrepreneur yesterday bought another 8 per cent of the troubled computer assembly group. The move takes Mr Sugar’s shareholding in Viglen to 41.7 per cent from 33.7 per cent, forcing him to mount a full takeover bid for the company at 24p a share – the price at which he bought the latest tranche of shares. Certainly it is proving to be in the Far East, as is the switch across a range of technologies from analogue to digital.