Takeover activity boosts expensive utilities sector

The UK utilities sector continues to be successful as a direct result of takeover activity, says Pau...

The UK utilities sector continues to be successful as a direct result of takeover activity, says Paul Mumford, fund manager at Cavendish Asset Management. However, Mumford feels while earnings, dividends and cashflows remain strong, the sector is very expensive overall due to increasing bid speculation. This is notable in the case of Centrica, the owner of British Gas, one of the likely bidders for nuclear energy made available in Belgium by the merger between Gaz de France (GdF) and Suez, the FrancoBelgian utility. Suez, which runs seven Belgian nuclear power plants through its Electrab...