The group's national profile has risen since it began sponsoring the ITV weather bulletins.Sources said London was in detailed talks with PowerGen, which could see the REC become one of the leading challengers outside its customer franchise, which covers 2.5 million homes in the capital. A partnership would combine London's billing know-how with PowerGen's brand, though the industry regulator has already ruled out preferential wholesale power supply contracts in such arrangements.PowerGen has also been in talks with British Gas to supply the group with electricity for its move into the domestic power market. The commercials begin during the peak advertising slot during News at Ten and portray electricity as an "off-the-shelf" commodity like soap powder.A PowerGen spokesman said the campaign, thought to cost pounds 3m this year, was designed to raise customer awareness of the potential of electricity competition. It is also part of the group's bid to increase by sevenfold its commercial and business customer base.London Electricity, owned by Entergy of New Orleans, has targeted PowerGen because its research showed the generator's brand was easily the best- known by consumers, despite the fact that the generator had never directly supplied domestic customers.
The move would see PowerGen beat National Power to become the first of the two privatised generators to enter the residential market. PowerGen yesterday declined to comment on the talks, although it is understood the generator is having discussions with three or four other regional electricity companies (RECs) about marketing partnerships. The talks coincided with PowerGen's move to step up its pounds 7m, three-year, advertising campaign, which will tonight be extended from newspapers to television. POWERGEN and London Electricity are in advanced discussions to launch a national drive into the domestic power market when competition gets under way later this year. Mr Taylor approached NatWest last summer to discuss the possibility of a merger, but was rebuffed.He believes that, in the absence of further rationalisation, the UK banking industry could find itself unable to compete with European "mega- banks", such as UBS and SBC, the merging Swiss banks.Mr Taylor has reportedly been lobbying senior government figures in an attempt to drum up support for a Barclays-NatWest link-up.. It sold parts of NatWest Markets for pounds 180m, a surplus of pounds 55m over the book value, but admitted the business had racked up a pounds 210m operating loss during 1997 and the bank would need to take a pounds 270m restructuring charge.It remains to be seen whether Lord Blyth's appointment will be sufficient to appease disillusioned NatWest shareholders.A number of institutions have also called for Mr Wanless's resignation and may press for Lord Alexander to depart sooner.Some in the City believe a merger, possibly with Barclays, is now the only way for NatWest to boost shareholder value.Martin Taylor, Barclays' chief executive, is known to be enthusiastic about such a match.
The move could see the role of chairman downgraded from a full-time to a part- time position.Lord Blyth's position at Boots is unlikely to be affected by the NatWest offer. He is to become executive chairman of the retailer later this year in place of Sir Michael Angus, Boots' non-executive chairman, who is retiring.NatWest is also expected to offer non-executive directorships to one or two other leading City figures in an attempt to inject new blood into its board.The forthcoming boardroom reshuffle is expected to result in the departure of two non-executive directors - Sir Desmond Pitcher, chairman of United Utilities, and Sir John Banham, chairman of Tarmac.Institutional shareholders have been pressing for changes to NatWest's board - and in particular the resignation of Lord Alexander - following a series of management crises at the bank over the past year.Last spring, NatWest admitted that options mis-pricing had left an pounds 80m "black hole" in its accounts, a debacle that resulted in the resignation of Martin Owen, then chief executive of NatWest Markets, the group's investment banking arm.In the summer, merger talks with both Abbey National, the former building society, and Prudential, the life assurer, collapsed, reportedly causing a rift between Lord Alexander and Derek Wanless, NatWest's chief executive.In the autumn, NatWest embarked on a costly exit from global investment banking. Worries about future Asian Airbus orders are likely to be off-set by a $4bn Latin American deal.. LORD BLYTH of Rowington chief executive of Boots, looks set to become the next chairman of NatWest, in an attempt to restore shareholder confidence in the embattled UK bank.
