Phoenix Natural Gas acquired for €250m

THE Northern Ireland distributor Phoenix Natural Gas has been acquired by British Firm East Surrey Holdings in a deal worth just over €250 million.

East Surrey, which had already owned 24.5% of Belfast-based Phoenix, paid €171.9 million for the 51% stake held by BG Group yesterday. A further 24.5% was bought from US energy firm KeySpan Corporation for €71m.

East Surrey Holdings holds the franchise to run water services in the south of England. Phoenix was set up in 1992 to develop a natural gas market and distribution system in the greater Belfast area by 2008.

It employs more than 400 staff. Phoenix has so far laid 2,340km of the distribution system. Supplies to industrial and commercial customers began in December 1996, with domestic customers starting to receive natural gas in 1997.

“We are confident Phoenix will continue to develop as a worldclass gas distribution company,” said East Surrey Holdings chairman Pat Barrett. The takeover is expected to be completed in December.

East Surrey, which released first-half results yesterday, said it was hoping to raise around 140m through a placing and open offer to help fund the acquisition.

East Surrey’s shares were barely changed at £3.10 in early trading yesterday, valuing the company at around €227m.