Bord Gáis sale unlikely before 2014

Following the withdrawal of one of the three bidders from the sales process, it now looks unlikely that Bord Gáis’s retail and power generation division will be sold before 2014.

Minister for Public Expenditure and Reform Brendan Howlin refused to comment on whether or not Bord Gáis would be sold before 2014. A spokesperson for Mr Howlin’s department said, “It would be inappropriate to comment on that sale as it was an ongoing process.”

Six days ago, following the sale of the National Lottery for €405m, Mr Howlin had restated that Bord Gáis would be sold before the end of the year.

Minister for Communications, Energy and Natural Resources Pat Rabbitte stood over his statement made to the Dáil when launching the Gas Regulation bill that Bord Gáis would be sold before 2014.

Merrion Capital economist Alan McQuaid said he believed that, due to Labour’s poor show in the recent polls, they were unlikely to sell what is seen as one of the country’s key assets for anything less than the reserve price. “I don’t see anything happening before the elections, particularly if they are getting less than they were hoping for. They’ll hold off, which is probably for the best.”

The change in tone regarding the sale of Bord Gáis came after Tenaga Nasional Bhd, Malaysia’s biggest energy producer, scrapped a bid for a unit of Ireland’s state-owned gas company.

Chief financial officer with state-owned Tenaga, Fazlur Rahman Zainuddin, said that Bord Gáis’ retail and power generation division “might not be the one to fit us as we have other priorities.”

The remaining bids are from a group led by Viridian Group Ltd, backed by Macquarie Group Ltd, and from Centrica Plc, Britain’s largest power company, according to people with knowledge of the matter.

The Viridian-led offer is above a €1bn reserve set by Bord Gáis, while Centrica’s is below, said three people who asked not to be identified as the process is private.

The Bord Gáis unit, which owns 15% of Ireland’s installed wind farms, had been expected to fetch as much as €1.4bn, two people said on May 24. Officials from Bord Gáis, Centrica, Viridian, Northern Ireland’s largest energy supplier, and Macquarie declined to comment on the process.