Centrica share price in focus as British Gas acquires AlertMe for £65m

Centrica Plc’s (LON:CNA) subsidiary British Gas is to acquire AlertMe, a UK-based connected homes company that offers energy management products and services. News has also emerged that the FTSE-100 listed utility is mulling final bids for its UK gas plants, Reuters has reported.

According to a regulatory statement issued this morning UK time, Centrica’s British Gas unit will buy AlertMe in a deal worth £65 million. British Gas already held a 21 percent stake in the Cambridge-based company and has been using some of its services, specifically in the form of the Hive Active Heating system that provides control over heating and hot water remotely, which is currently used by 150,000 customers of AlertMe.

According to the release, the acquisition demonstrates the company’s “continued commitment to innovate for our customers and reinforces British Gas’ leading position in connected homes in the UK”. The deal will also enable further development in the field of connected homes products and services in other parts of the group, through the Direct Energy subsidiary in North America, and Bord Gáis in the Republic of Ireland.

In separate news, Centrica is currently weighing final bids for the gas-fired power plants it has put up for sale but the offers are likely to be below the company’s target price, people familiar with the matter told Reuters yesterday. One of the sources close to the bidding process told the London-based newswire: “My understanding is that three parties are still looking,” with two other sources confirming the number.
The FTSE 100-listed utility put three of its large combined-cycle gas turbine (CCGT) power plants in Britain up for sale last May after deciding to concentrate on more flexible small-scale gas plants instead. At the time, Centrica put a £500 million price tag on the Langage, South Humber and Killingholme power plants. Since then, however, the utility has dropped the older Killingholme station in north-east England from the sales process, according to Reuters.
As of 12:50 GMT, Centrica Plc’s share price had edged 0.17 percent down to 287.00p. The utility’s stock has declined over eight percent during the past 12 months.
According to the Financial Times, as of 06 February, 2015, the consensus forecast amongst 35 polled investment analysts covering Centrica plc has it that investors should hold their position in the company. The median target of the 18 analysts offering 12 month price targets is 275.00p with a low estimate of 225.00p and a high estimate of 325.00p.
As of 13:55 GMT, Friday, 13 February, Centrica PLC share price is 287.35p.