Invesco star Woodford sees more utility M&As

By Laurence Fletcher

LONDON (Reuters) - A number of takeover bids are likely in the electricity generation sector this year, Invesco Perpetual star fund manager Neil Woodford, a major shareholder in British Energy, said.

The comments from Woodford come as the UK's biggest electricity producer British Energy (BGY.L: Quote, Profile, Research) said it had received early stage bids which value it at more than 10.8 billion pounds.

"So we would expect to see M&A in the utilities sector for example, in the electricity generation sector. There are a number of opportunities I think we are likely to see converted into reality this year," Woodford said in a video interview on the website of broker Hargreaves Lansdown (HRGV.L: Quote, Profile, Research).

Woodford is one of the UK's top investors and manager of the 8.5 billion pound Invesco Perpetual High Income and 6 billion pound Income funds.

According to his High Income fund's latest factsheet his top 10 holdings include British Energy at 5 percent and National Grid (NG.L: Quote, Profile, Research) at 4.5 percent.

"I think the old-fashioned corporate consolidation activity is going to come back. Banks are still willing to lend against certain projects, are still willing to lend in certain industries," he said.

"I think albeit that the cost may have risen slightly, the logic of consolidation is still compelling in some sectors."

Woodford also said that while some areas of the market will struggle in a tougher economic environment, he does not believe now is the time to allocate away from stocks.