National Grid Said to Pick Macquarie, Fosun Bids as CPPIB Exits

  • Second-round bids for U.K. power grids said due in November
  • CKI said to analyze regulatory hurdles tied to National Grid

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 U.K. 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 to make final bids for the assets by the November deadline, the people said, asking not to be identified as the information is private. A band 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 U.K. 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 and CPPIB declined to comment. A representative for Fosun couldn’t immediately be reached outside of regular business hours. Representatives for China Resources Gas and Cheung Kong Infrastructure didn’t immediately respond to requests for comment outside of regular business hours.

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