EDF’s £4bn UK Network Arm May Trigger Bidding War

16 August 2009 (Last Updated August 16th, 2009 18:30)

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

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.