Italy's Enel joins race for U.S. utility PPL's British unit: sources

LONDON (Reuters) – Europe’s biggest utility Enel is considering joining the race for British power utility Western Power Distribution (WPD), as part of a consortium advised by investment bank Rothschild, two sources close to the matter said.

FILE PHOTO: A logo of Italian multinational energy company Enel is seen at the Milan’s headquarter, Italy, February 5, 2020. REUTERS/Flavio Lo Scalzo/File Photo

Still in the running are also investment and pension funds Global Infrastructure Partners, Brookfield Asset Management and CDPQ, which have formed one consortium, and a group led by the infrastructure investment arm of Australia’s Macquarie Group, Canada’s PSP Investments and Dutch pension fund APG, the sources said.

The sale, launched by current owner U.S. utility PPL Corp in August, has faced a series of delays, partly due to uncertainty at the end of last year on whether Britain would leave the European Union without a trade deal, sources previously said.

Binding bids are now tentatively expected at the end of February, two separate sources said.

Based on earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.25 billion pounds ($1.67 billion) for the financial year ended in March, WPD could fetch a valuation of up to 12 billion pounds.

Enel CEO Francesco Starace said in November the company would pursue mergers and acquisitions in distribution grids and had earmarked around 46% of spending for its regulated network business.

Enel declined to comment on its interest in WPD. Rothschild declined to comment.

Although the process has not been highly contested, given the size of the assets and the upcoming regulatory regime for Britain’s networks, which sets fixed investment returns for grid owners, PPL and its adviser JP Morgan have gauged the interest of many European utilities and investment funds.

Spanish energy group Naturgy, which was reported to be considering teaming up with Germany’s Allianz, has refrained from expressing an interest, the two sources said.

WPD delivers electricity to about eight million customers across central and southwest England, and south Wales, according to its website.

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