Dempsey was ‘unconvinced’ ESB move for Viridian made sense

THE ESB’s ambitions to take over Belfast-based energy company Viridian may be resurrected if Arcapita, the Bahrain venture capital group, decides to sell on the business at a later date.

Reliable sources have told the Irish Examiner that the ESB’s failure to proceed with a bid for the group early last month was because Communications Minister Noel Dempsey was unconvinced that the deal made sense.

It was alleged the minister failed to understand the dynamics of the ESB bid and the proposal never even got to the board for consideration.

From the start the ESB were under pressure from both sides because Viridian and its board favoured the Bahrain deal while its own minister was unconvinced.

Intervention by Ulster Unionist Party leader Reg Empey added an obstacle to the ESB’s attempts to buy the business when he called on the British Government to block any moves on the company from whatever source.

ESB was prepared to pay €3.1 billion for Viridian, which is what the Bahrain venture capital group ultimately paid. Its original offer was €2.4bn.

If the ESB had received the go-ahead a takeover of Viridian would have created a powerful all-island energy company.

A move by the ESB to take over Viridian would have given it control of the main supplier of electricity in the North, with close to 800,000 customers.

In the Republic, Viridian operates the Huntstown power station in north Dublin and is building a second power station on the same site.

The ESB is the dominant force in the Republic, controlling 60% of power generation. It also owns the Coolkeragh plant in the North.

There are plans as part of energy policy to develop interconnection between the markets on either side of the Border.

The ESB had a turnover last year of €2.7bn with pre-tax profits of €240m. Viridian’s turnover was £976m (€1.4bn) and profits of £129m (€193m).

About one-third of its total revenue comes from the Republic.

Viridian was formed in 1998, following the privatisation of Northern Ireland Electricity five years earlier.

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