Macquarie buys National Grid wireless for 2.5 billion pounds
Macquarie Bank has agreed to buy the UK broadcast and mobile phone mast business of energy network operator National Grid for 2.5 billion pounds in cash.
National Grid, which had been looking to demerge the unit to focus on its core gas and electricity transmission operations, said on Tuesday it planned to return 1.8 billion pounds of the proceeds to investors by buying back shares. Macquarie already owns a high proportion of the UK's transmission masts through its Arqiva business.
An Arqiva spokesman said it was too early to comment on job losses. "There will be some rationalisation," he said. "There's a considerable amount of duplication of field operations. We're currently sending two sets of vans up to transmitters on the same hilltop."
But he said staff could retrain to take advantage of future expansion into digital services. "There's a huge task to be done with the digital switch-over, which should keep us busy for the next 5 or 6 years," he said.
The deal is expected to close later on Tuesday, after which the National Grid business will be held in a separate company, Macquarie UK Broadcast Ventures Ltd, pending approval of the deal by competition regulators.
A source close to the matter told Reuters last week that Macquarie was one of six firms set to make second-round offers for National Grid's broadcast and mobile phone masts business, with bids then expected to be pitched at about 2 billion pounds.
One London analyst said the price looked good at 19 times last year's earnings and ahead of an average forecast of 2.2 billion pounds. "It's a decent price, but not a blowout price," he added.
National Grid, which runs 4,500 miles (7,240 km) of power lines and 4,300 miles of gas pipelines in the UK, said it expected the deal to boost earnings per share immediately. The group also said it was progressing the sale of its much smaller U.S. Wireless business.
Source: Reuters
Date: 07.04.2007 [ID: 7]