Australian investor Macquarie is said to be in talks with the Canada Pension Plan Investment Board (CPPIB) and the Abu Dhabi Investment Authority (ADIA) to submit a bid for EDF’s UK electricity network, according to the Sunday Telegraph.
EDF distributes power to close to eight million homes in the south-east and east of England. Its regulated asset base (RAB) is close to £4 billion (€4.4 billion; $6.4 billion), which means that a sale at a 20 percent premium could net EDF close to £5 billion. Deutsche Bank, Barclays Capital and BNP Paribas have been appointed by the French firm to run the sale.
The announcement that Macquarie is now in talks to join CPPIB and ADIA could signal that many of the companies that have been mentioned in connection with the sale have begun to coalesce into consortia. Goldman Sachs and advisory firm Lexicon Partners have reportedly been appointed to advise the consortium on their bid.
Several other bidders have shown interest in the sale, including a consortium of Scottish and Southern Energy and Borealis, another Canadian pension. Cheung Kong Infrastructure, the fund owned by Asia’s wealthiest man, Li Ka-shing, is said to have hired Royal Bank of Scotland to advise on the deal. National Grid is thought to be another contender for EDF’s assets and is believed to have hired Morgan Stanley to provide advisory services. Global Infrastructure Partners, which recently purchased London’s Gatwick airport, is also said to be mulling a bid.
EDF started the sale of its UK assets last October with the aim of cutting €5 billion in net debt by the end of 2010. A spokesperson from the company did not wish to comment on when initial bids are expected.