National Grid plc’s disposal of its UK Wireless business to Macquarie UK Broadcast Ventures Limited for GBP 2.5 billion will be followed by a return of GBP 1.8 billion to shareholders.
National Grid plc’s disposal of its UK Wireless business to Macquarie UK Broadcast Ventures Limited for GBP 2.5 billion will be followed by a return of GBP 1.8 billion to shareholders.
The total consideration that Macquarie is paying for the UK Wireless business represents a multiple of 19.3 times EBITDA for the year ended 31 March 2006.
Following the announcement on 16 November 2006 regarding the proposed de-merger of the UK Wireless business, National Grid received approaches from various parties seeking to purchase this business.
National Grid’s Board has determined, following a competitive process, that the agreed sale represents the most attractive and certain outcome for shareholders. The sale is expected to enhance earnings per share immediately.
Following completion, National Grid confirmed it will return GBP 1.8 billion to shareholders via an extension of the existing share buy-back programme.
Steve Holliday, Chief Executive of National Grid, said: ‘We are delighted with the outcome of this transaction, which has secured an attractive premium for a great business which we have grown successfully. We are confident that it delivers greater shareholder value than a de-merger. This represents a significant step in our strategy of focusing on the UK and US electricity and gas markets, and demonstrates our commitment to generating shareholder value. Meanwhile we continue to progress the sale of our much smaller US Wireless business.’
The repurchase programme is expected to be effected on the London Stock Exchange over the next 12 to 18 months and will be dependent on market and economic conditions. Shares will be repurchased in accordance with the Board’s general authority to make market repurchases of ordinary shares, as approved by shareholders. The Board will seek shareholder approval to renew this authority at our next AGM.
National Grid Wireless in the UK is the leading UK independent provider of network infrastructure to mobile network operators. National Grid Wireless operates around 5,000 active sites used for mobile communications. It is one of two providers of transmission networks for analogue and digital television and radio broadcasters with around 750 purpose-built broadcast towers and associated transmission equipment. National Grid Wireless also holds licenses for two digital television multiplexes utilised by broadcasters in the UK.
For the year ended 31 March 2006, National Grid Wireless UK generated operating profit of GBP 70m on revenues of GBP 297m and had gross assets of GBP 1.45 billion.
