French energy firm EDF’s decision to auction its £4bn UK network arm may trigger an intense bidding war, with Scottish and Southern Energy (SSE) expected to be at the forefront.
EDF is considering an auction to decrease its £21.2bn debt accumulated following last year’s £12.5bn spent on British Energy.
SSE in collaboration with Ontario Teachers’ Pension Plan and Borealis Infrastructure, two Canadian pension funds, is expected to initiate a proposal.
An SSE-led consortium, however, is likely to face stiff competition from Abu Dhabi Investment Authority and an infrastructure group owned by Li Ka-shing.
A majority of bids are expected to be presented as part of a consortium as any move would need a £1.4bn equity injection.
EDF has supposedly enlisted Barclays and Deutsche Bank to supervise the auction.
The auction is likely to commence in September.