HK firm offers 9.0 billion dollars for British power network

30th July 2010, Comments 0 comments

A consortium led by Hong Kong's richest man Li Ka-shing has made a 9.0-billion-dollar "irrevocable" offer to take over the British power distribution network of French electricity giant EDF, the French company said Friday.

If completed, the deal would be the biggest by a Hong Kong entity in Britain.

EDF Energy, the largest electricity supplier in Britain, is owned by EDF, the state controlled French giant which said in October it had put its three distribution grids up for sale as it tries to reduce debt. EDF group is Europe's biggest electricity producer.

The Hong Kong consortium beat rival offers from a British energy firm and Canadian-Australian-Abu Dhabi consortium, a source close to the deal was quoted as saying by the Dow Jones news wire.

An EDF statement said said it had received "an irrevocable offer from a consortium consisting of Cheung Kong Infrastructure Holdings Ltd (CKI), Hongkong Electric Holdings Ltd (HEH) and the Li Ka-Shing Foundation (the Cheung Kong group) to acquire 100 percent of EDF Energy plc's ownership in its United Kingdom regulated and non-regulated network activities."

It said the offer was made up of "equity consideration" of 3.2 billion pounds (3.8 billion euros) and amounted to 5.8 billion pounds (6.9 billion euros) when debt was assumed.

EDF said it had granted the Cheung Kong group a period of exclusivity for the deal.

"Starting immediately, EDF group expects to finalise with the Cheung Kong group its industrial project and to negotiate a partnership agreement for commercial cooperation in the UK market."

EDF group will announce details of the partnership accord in early September, the statement said, and then submit the offer to its board for final acceptance.

The deal also needs regulatory approval from the European Union, British government and the boards of the Hong Kong groups.

The Hong Kong consortium beat rival bids from Scottish & Southern Energy and a consortium comprising the Abu Dhabi Investment Authority, Macquarie Capital and Canada Pension Plan, the source quoted by Dow Jones said said.

The deal is Li's fifth purchase in Britain, and comes as he tries to increase ownership of utilities overseas in a bid to broaden his earnings base owing to difficulties in expanding in Hong Kong.

He also has interests in New Zealand, Australia and Canada.

Trading in Cheung Kong Infrastructure and Hongkong Electric was suspended in Hong Kong on Friday pending an official announcement.

With a fortune of 21.3 billion US dollars, Li is the world's 16th richest person, according to an annual Forbes magazine ranking in November.

The French state owns 85 percent of EDF group, which operates France's 58 nuclear reactors, the world's biggest network of atomic power plants. It said it had consolidated sales of 66.3 billion euros in 2009.

© 2010 AFP

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