Over the past fifteen years, sales of equity stakes in UK regulated infrastructure have generally taken place at sizeable premia to the companies’ Regulated Asset Values (RAV). The sale of a 61% equity stake in National Grid’s gas distribution business (NGGD) in November 2016 was no exception: the implied valuation premium is the highest in the energy, water or transport sectors since 2000, and will attract attention from Ofgem as well as other industry stakeholders. This note comments on the implications of the MAR for the cost of finance in gas distribution.
Download CEPA's briefing: LESSONS FROM THE SALE OF NATIONAL GRID GAS DISTRIBUTION
Ian Alexander, a director and regulatory economist with almost 25 years’ experience of supporting regulators and companies in price reviews. He has worked extensively with Ofgem on both traditional and innovative regulatory issues.
Tom Cochrane A managing consultant with over ten years’ experience with a focus on energy sector regulation. He was a key part of the team providing regulatory due diligence for a potential bidder for a major UK energy network transaction.