Takeover deal for UK Power Networks collapses after owner raises £15bn price tag
The proposed takeover of Britain’s largest electricity distributor by a consortium led by KKR and Australia’s Macquarie has collapsed following a last-minute demand to raise the sale price from from its Hong Kong owner
Billionaire tycoon Li Ka-shing’s CK Infrastructure Holdings – which bought UK Power Networks for £5.5bn in 2010 – tried to elevate the sale price just two days before an agreement was due to be signed last month, according to The Financial Times.
The six-member consortium decided the asking price was too high and subsequently pulled out of the deal.
CKI’s decision was reportedly the result of the sharp rise in UK inflation which is currently running at 9.1 per cent, its highest level since the early 1980s.
UK Power Networks is the largest electricity distribution network operator in the UK, transmitting to 8.3m homes and businesses in the south-east and East Anglia, and earning about a quarter of all revenues in the sector.
The company faced sustained scrutiny this year when thousands of customers were left without power during storms.
It is one of six monopoly network companies which operate the country’s pipes and wires, and gain all their revenues from customer bills – which climbed to a record average of £1,971 per year in April, with Ofgem warning the price cap could rise to £2,800 per year in October.
The aborted sale took place amid talks between Ofgem and the UK electricity distribution network operators, including UKPN, over how much they will be allowed to charge customers for the five years starting in 2023.