Scottish Power and Eon, the German utility that is in talks to buy its UK counterpart, both reported strong results on Thursday as they benefited from rising energy prices.

Eon is in early-stage talks to take over Scottish Power in a deal that could be worth about €15bn ($17.6bn), people familiar with the matter said. But they cautioned the German utility could still decide to not make an offer, particularly if the price went too high.

Wulf Bernotat, Eon’s chief executive, on Thursday declined to comment specifically on Scottish Power. But he said Eon was comfortable making a series of small and medium investments in its core businesses, particularly gas. “We do not rule out large acquisitions if they meet our strict investment criteria,” he added.

Eon is under mounting pressure to act either through acquisitions or by increasing returns to shareholders as it has more than €15bn cash on its balance sheet, up €3bn from a year earlier as a series of disposals has brought in more money than expected.

The inflow of money from the €7bn disposal of its real-estate arm and €1.5bn sale of its gas metering business led to a tripling of net income in the third-quarter reaching €3.4bn. But operating profit came in at a third of the previous year’s level due to a charge from Degussa, the chemical company in which it owns 43 per cent, as well as from a storm in Sweden and a reduction in the value of its energy derivatives.

Scottish Power yesterday said it had scaled back its push to win new customers because higher gas prices had made the energy retail business less profitable.

The UK group won 73,000 new UK customers in the six months ending September 30, bringing the group’s total to 5.2m electricity and gas accounts.

This helped push Scottish Power’s revenues up to £2.16bn ($3.7bn), from £1.91bn in the first half of last year, and pre-tax profits up to £273m, from £189m. The earnings figures were adjusted to exclude the Pacificorp division in the US, which is being sold, and the affects of IAS 39 accounting.

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