Centrica Share Price: Group In €1.1 Billion Irish Power Deal

on Mar 25, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Tuesday, March 25: Centrica Plc (LON:CNA) has agreed to acquire the gas and electricity supply arm and a gas-fired power plant from Ireland’s state-owned Bord Gáis Éireann for €1.1 billion (£920 million) in partnership with two private-equity firms.

Centrica’s share price has added about one percent in London this morning.
**Bord Gais Energy deal**
Centrica and its partners iCON Infrastructure Partners and Brookfield Renewable Energy said today in a statement that they had agreed to acquire Bord Gáis Energy (BGE), the vertically integrated energy business of Ireland’s Bord Gáis Éireann, for €1.1 billion (£920 million).

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The transaction, due to close in the first half of the current year, will see Centrica acquire BGE’s gas and electricity supply business in Ireland and the Whitegate gas-fired power station, with the assets making up €210 million (£175 million) of the total enterprise value. The FTSE 100 company however added that the net consideration payable for the deal would be €150 million with Bord Gáis Éireann benefitting from an estimated €60 million of cash value accruing from its ownership of BGE from January 1, 2014 until the close of the transaction.

The UK utility’s partners iCON Infrastructure Partners and Brookfield Renewable Energy Partners will acquire BGE’s firmus energy supply and regulated gas distribution assets in Northern Ireland, as well as BGE’s renewable generation assets.
Ireland’s government picked Centrica and its partners as the preferred bidder in December after it had put the Bord Gais assets up for sale as part of its privatisation programme. (Centrica share price: Consortium to acquire Ireland’s Bord Gáis Energy)

**Neighbouring market expansion**

Centrica’s chief executive Sam Laidlaw noted in the statement that the deal presented “a unique opportunity for Centrica to take a first step in a neighbouring market with strong links to the UK”.
Whitman Howard analyst Angelos Anastasiou told Reuters that the transaction would provide the UK group with a platform for growth in an adjacent market.

Centrica, which is the parent of the UK’s biggest energy supplier British Gas, has been under political pressure in recent weeks with Energy Secretary Ed Davey suggesting that the utility could be broken up to curb a monopoly. (Centrica share price drops as Davey takes aim at British Gas margins) Last month, the company reported that full-year adjusted operating profit at its British Gas business had fallen six percent to £571 million.
**Barclays lowers price target**
Analysts at Barclays, who have an ‘underweight’ rating on Centrica, today lowered their price target on the stock from 285p to 275p, while Credit Suisse reiterated its ‘neutral’ rating on the stock with a price target of 310p. Deutsche Bank last week reaffirmed its ‘hold’ rating on Centrica with a price target of 300p, while BNP Paribas reiterated its ‘underperform’ rating on the stock with a price target of 310p.
Centrica currently has a consensus ‘hold’ rating and an average price target of 360.83p.
**As of 09:03 UTC, buy Centrica shares at 334.80p.**
**As of 09:03 UTC, sell Centrica shares at 334.50p.**


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