Energy Group chases $800m US assets
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Your support makes all the difference.Energy Group, the power company demerged from Hanson Group in February this year, is interested in buying power assets in New England worth some $800m (pounds 500m).
US power company PacifiCorp recently bid $9.6bn for Energy Group, but the bid lapsed after it was referred to the Monopolies and Mergers Commission.
Energy Group has offered undisclosed sums for Boston Edison Company's natural gas and oil fuelled plants, which have a book value of some $500m, and 30 hydro-electric plants belonging to Central Maine Power Company that are valued at $298m.
Power markets across the US are preparing for deregulation, and power companies in New England, among other regions, have been lining up to shed assets.
"Our primary objective in the US is to look at generation," said a spokesman for the group, adding that the company intends to build a business "similar to what we have in the UK", where Energy Group generates electricity and supplies electricity and gas.
He said he expects to find out whether Energy Group's bid has been short- listed in the "next couple of weeks".
The company is also negotiating with a range of power companies supplied with coal from its Peabody unit mines and to use the plants' idle capacity to generate additional electricity, which Energy Group would sell outside of its local market.
In May, it completed the acquisition of Citizens Lehman Power LLC, a Boston-based company that arranges power sales between utilities, and pledged to spend hundreds of millions of dollars on US power generation assets as that market deregulates.
It was an unsuccessful bidder for 18 power plants sold by New England Electric System to PG&E Corp for $1.59bn, a 45 per cent premium to book value.
The MMC is due to report on PacifiCorp's bid by 21 November. If it clears the merger, PacifiCorp could bid again. Energy Group's board, which accepted the original 690-pence-a-share offer, would not be obliged to accept the new offer.
"We will reassess any further approaches from PacifiCorp or anybody else if and when they occur," the spokesman said. "We will take into account the market conditions, the profitability and the prospects of the company at the time."
Since 10 June, when rumours of a bid began circulating, the Financial Times electricity index has risen by 14 per cent.
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