Centrica Said to Plan Bid for Viridian in Northern Ireland

  • Centrica said to work as part of consortium on possible bid
  • AMP also weighing offer for Northern Irish power company

Centrica Plc, the largest energy supplier to U.K. homes, is preparing a bid for Northern Irish power company Viridian Group Ltd., according to people with knowledge of the matter.

Centrica is working as part of a consortium as Viridian’s owner Arcapita Bank BSC awaits first-round offers from potential bidders by Friday evening in Belfast, said one of the people, who asked not to be named, as the process is private. Australian financial services firm AMP Ltd. is also lining up an offer, said another person.  The yield on Viridian’s 2020 bonds fell about 1 percentage point to 6.1 percent as of 9:55 a.m. in London.

Arcapita, which bought Viridian in 2006, may sell the business for more than 1 billion euros ($1.1 billion), the Irish Independent reported in September. Arcapita filed for Chapter 11 protection in the U.S. in 2012 after talks with creditors over a syndicated loan failed, exiting bankruptcy a year later after securing finance from Goldman Sachs Group Inc.

Centrica entered the Irish energy market in 2014, buying state-owned energy firm Bord Gais Energy for 1.1 billion euros as part of a group including Brookfield Renewable Energy Partners LP and iCON Infrastructure. While Centrica led the bid, it only bought 210 million euros of the assets, made up of BGE’s gas and electricity supply business and a gas-fired power station.

Brookfield, which bought BGE’s wind energy assets, has also been assessing Viridian’s wind business, according to one person familiar with the matter.

“We see an acquisition as being in line with Centrica’s recent strategic moves,” John Musk, a utilities analyst at RBC Capital Markets LLC, said in a note. “Centrica could look to carve off the wind assets, potentially selling/allocating these to Brookfield once again.”

Scotland-based SSE Plc, which operates in Ireland as SSE Airtricity, may potentially be interested in Viridian, particularly its power generation assets, according to Ashley Thomas, an analyst at Societe Generale SA in London.

Other contenders could include AES Corp., the Arlington, Virginia-based energy group which operates Northern Ireland’s biggest power generation business, according to Joseph McGinley, an analyst with Davy, Ireland’s largest securities firm.

“AES already have a relationship with the company as Viridian’s power procurement business sells energy on behalf of the AES plants,” said McGinley.

Spokesmen for Arcapita, Centrica, Brookfield, AES, SSE declined to comment. Officials at AMP didn’t return a call or e-mail to the company’s London office seeking comment.

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