E.ON U.K. Grid Said to Draw Interest From MidAmerican, PPL, CKI
E.ON AG’s U.K. power grid is drawing interest from MidAmerican Energy Holdings Co., PPL Corp. and Cheung Kong Infrastructure Holdings Ltd. in a sale that may fetch about $6 billion, said people with knowledge of the talks.
E.ON, Germany’s largest utility, is considering the new approaches after earlier talks to sell the asset failed, said the people, who declined to be identified because the negotiations are private. CKI, controlled by Hong Kong billionaire Li Ka-shing, MidAmerican, owned by Warren Buffett’s Berkshire Hathaway Inc., and PPL all have operations in the U.K., according to their websites.
The sale of the U.K. electricity lines is part of E.ON’s plan to sell 15 billion euros ($20.5 billion) of assets by the end of 2013. The company is seeking to slash debt and raise funds for growth outside Europe, where it faces stagnant demand and levies from governments trying to reduce budget deficits.
E.ON had entered exclusive talks last year to sell the assets to a group led by the Canada Pension Plan Investment Board, people familiar with the matter said in November. Dusseldorf-based E.ON began talks with other parties after it rejected a revised bid from the group, people said.
No deal is imminent and the talks are still in early stages, two people said. Jonathan Smith, a spokesman for E.ON in London, declined to comment. A call to Margot Leong, a spokeswoman for CKI in Hong Kong, outside of regular office hours wasn’t immediately returned.
Ann Thelen, a spokeswoman for MidAmerican, declined to comment in an e-mail message. George Biechler, a spokesman for PPL, declined to comment. A spokeswoman from the Canada Pension Plan also declined to comment.
E.ON is working with JPMorgan Chase & Co. and Barclays Plc on the sale of the grid, people said in November. PPL’s talks with E.ON were reported last month by the energy news website SparkSpread and CKI’s interest was reported by the Sunday Times in the U.K.
A group led by CKI bought Paris-based Electricite de France SA’s U.K. power lines last year. The Canada Pension Plan led a rival group in bidding for EDF’s grid alongside Abu Dhabi Investment Authority and Macquarie Group Ltd.
PPL, based in Allentown, Pennsylvania, agreed last year to pay $6.7 billion in cash and take on $925 million in debt for E.ON’s Louisville Gas & Electric and Kentucky Utilities units in the U.S. PPL’s U.K. unit is Western Power Distribution Holdings Ltd., an owner of electricity lines in Wales and Southwest England.
MidAmerican, based in Des Moines, Iowa, owns CE Electric U.K., which operates Northern Electric Distribution and Yorkshire Electric Distribution and distributes power to 3.8 million customers in the U.K., according to CE Electric’s website.
To contact the reporters on this story: Brett Foley in London at firstname.lastname@example.org; Jeffrey McCracken in New York at email@example.com; Nicholas Comfort in Frankfurt at firstname.lastname@example.org