Grid bids sought

UK com­pany in­vites Chi­nese firms for gas-dis­tri­bu­tion work


Na­tional Grid Plc has se­lected a con­sor­tium of in­vestors that in­cludes Al­lianz SE and the in­fra­struc­ture arm of Aus­tralian in­vest­ment bank Mac­quarie Group Ltd as po­ten­tial bid­ders for its UK gas dis­tri­bu­tion busi­ness, peo­ple fa­mil­iar with the mat­ter said.

Two sep­a­rate groups of Chi­nese in­vestors, in­clud­ing one led by Fo­sun In­ter­na­tional Ltd and an­other by China Re­sources Gas Group Ltd, have also been in­vited tomake fi­nal bids for the as­sets by the Novem­ber dead­line, the peo­ple said, ask­ing not to be iden­ti­fied as the in­for­ma­tion is pri­vate. A group of in­vestors that in­cluded Canada Pen­sion Plan In­vest­ment Board and Mid­dle East­ern wealth funds has dropped out, the peo­ple said.

Che­ung Kong In­fra­struc­ture Hold­ings Ltd is also weigh­ing a sec­ond-round bid, though the com­pany is an­a­lyz­ing po­ten­tial reg­u­la­tory hur­dles first, one of the peo­ple said.

Na­tional Grid is sell­ing at least 51 per­cent of its UK gas dis­tri­bu­tion unit, made up of four re­gional net­works, which RBC Cap­i­tal Mar­kets es­ti­mates could be worth as much as 12.6 bil­lion pounds ($15.4 bil­lion). Sell­ing the stake in the re­gional gas busi­ness, which serves al­most 11 mil­lion cus­tomers, will al­low Na­tional Grid to in­crease its div­i­dend and meet an­nual as­set growth tar­gets of 5 to 7 per­cent, the com­pany has said.

Spokes­men for Na­tional Grid, Mac­quarie, Al­lianz, CPPIB and Fo­sun de­clined to com­ment. Rep­re­sen­ta­tives for China Re­sources Gas and Che­ung Kong In­fra­struc­ture didn’t im­me­di­ately re­spond to re­quests for com­ment.

Na­tional Grid shares fell 0.8 per­cent to 1,060 pence at 11:30 am in Lon­don trad­ing. They have risen 13 per­cent this year.

Bri­tish util­ity as­sets his­tor­i­cally at­tract for­eign com­pa­nies that fa­vor steady in­come gen­er­a­tion, such as pen­sion funds and other as­set man­agers. Canada’s Brook­field As­set Man­age­ment Inc bought PNE Wind AG’s UK project pipe­line last year for as much as 103 mil­lion pounds. A con­sor­tium backed by Hong Kong bil­lion­aire Li Ka-shing in 2012 agreed to buy gas dis­trib­u­tor Wales & West Util­i­ties Ltd for 645 mil­lion pounds.


Na­tional Grid Plc em­ploy­ees stand on a sus­pended plat­form as they work to re­place in­su­la­tors on an elec­tric­ity py­lon in Ken­dal, UK.

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