Iberdrola in Pole position for electricity supply group investment

Poland’s state treasury has picked Iberdrola, the second largest power utility in Spain, to be the preferred bidder for a strategic stake in the country’s largest electricity supplier. In an announcement on Monday, it said that Iberdrola have exclusive rights until September 14, to negotiate a purchase of the 25 per cent stake being released in the northern G-8 group.

Based in the industrial city of Gdansk and further south, the companies supply electricity to 2.6m customers, accounting for about 17 per cent of the Polish market. Analysts have valued the 25 per cent stake at roughly $400m.

Poland’s tender to sell the 25 per cent interest in the G-8 companies attracted considerable interest. Iberdrola were among at least nine other interested parties which included France’s EdF, Belgium’s Electrabel, Sydkraft of Sweden, US owned PSEG Europe and Ireland’s ESB International. Spain’s other two leading utilities; Endesa and Union Fenosa also made bids.

Poland’s power distribution has been eyed by most of the pan-European players eager to enter the 40m retail-customer market. Most view the market as potentially highly profitable as the country is to gradually lift its government-set price regime.

G-8 is the second distributor to be sold, after a tender for 25 per cent of southern GZE firm attracted strong demand late in 2000 before being sold to Swedish power group Vattenfall for $960m in cash plus long-term investments.

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