Finland's Elenia Is Said to Consider Sale for Up to $3.5 Billion

  • Utility’s executives plan to meet potential bidders in Asia
  • Initial bids for company expected to be due in September

Elenia Oy’s owners are preparing to kick off a sale that could value Finland’s second-largest power distributor at as much as 3 billion euros ($3.5 billion), restarting a process that was delayed last year, people with knowledge of the matter said.

The utility has sent out teasers and senior executives are planning to meet with potential suitors in Asia in the coming weeks, the people said, asking not to be identified as the information is private. Elenia is expected to send out more detailed information and ask for initial bids in September, they said.

Hong Kong’s CK Infrastructure Holdings Ltd., backed by billionaire Li Ka-shing, and State Grid Corp. of China are among companies that expressed interest in the assets last year, though it’s unclear if they intend to make an offer as part of the current process, the people said. The company is owned by a group including 3i Group Plc and Goldman Sachs Infrastructure Partners that agreed in 2011 to buy the business from Swedish utility Vattenfall AB for 1.54 billion euros.

Elenia Chief Executive Officer Tapani Liuhala and a representative for Goldman Sachs declined to comment. State Grid and 3i didn’t immediately respond to requests. CKI couldn’t be immediately reached for comment.

Power and utilities companies are drawing growing interest from investors, especially from pension funds, attracted by their steady cash flow. Utility companies’ deals in Europe rose 83 percent to $26.3 billion this year from the same period a year ago, data compiled by Bloomberg show.

Tariff Backlash

Elenia operates in more than 100 municipalities across Finland, supplying heating and electric power to 420,000 homes and offices, according to its website.

The sale of Fortum Oyj’s Finnish electricity grid, now known as Caruna, had drawn interest from CKI as well as Canada’s Borealis Infrastructure in 2013, people familiar with the talks said at the time.

Power distributors in Finland have been under public scrutiny since last year when Caruna sparked an outcry over proposed price increases, leading the government to cap hikes to power distribution tariffs. Elenia has said that the limits won’t have an impact on power distribution companies’ ability to develop their operations.

— With assistance by Kati Pohjanpalo, Sarah Syed, Prudence Ho, and Aibing Guo

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