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National Grid is said to be considering a £10 billion sell off of its gas distribution networks, according to weekend reports.
The latest speculation ups the ante on the transmission operator’s rumored sell-off of its £1 billion gas metering business reported in May this year, to a complete sale of its four regional gas distribution businesses.
The Sunday Times followed up its earlier report that National Grid plans to sell its 17 million gas meter assets ahead of the roll out of smart meters, saying sources close to the company have revealed plans for a £10 billion disposal of gas assets to foreign investors searching for infrastructure opportunities.
According to the fresh report, talks for the multi-billion pound deal are at an early stage, and no financial advisor has yet been appointed.
The unnamed sources told the newspaper that Canadian pension funds and Asian sovereign wealth funds have been identified as potentially interested parties.
National Grid sold off four of its gas distribution businesses 11 years ago. Sources cited by the national newspaper now say the remainder could be sold off as an outright sale or a piecemeal deal of separate assets or a stake in the assets.
Citi analysts said the move would be welcomed by the market as a “a good way” to monetize the valutation of the regulated assets, but said the size of the deal would determine whether this would result in a special dividend payout or “fire power for acquisition”.
National Grid is due to report its latest financial results on Tuesday 10 November.
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