UK companies are feeling the heat from private equity like never before. Now National Grid appears to be mounting a defence against a private equity bid even before an offer has emerged, according to Lombard.
The power utility yesterday unveiled a strategic review comprising the demerger of its mobile masts business – news of which pushed the shares up 7 per cent – and the sale of a non-core Australian business. For good measure, it pledged to return $1.9bn to shareholders over the next five years.
National Grid said the moves had nothing to do with shoring up defences ahead of any bid. And these are indeed sensible measures in their own right. The businesses to be jettisoned are almost certainly worth more to someone else.
All the same, the review comes amid speculation that National Grid is a prime target for a break-up or private equity approach.