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JPMorgan sparks £2bn sale of electricity distribution giant ENW

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One of the UK’s biggest electricity distribution networks is plotting a £2bn sale in one of the largest infrastructure deals being prepared in the run-up to Britain’s departure from the European Union.

Sky News has learnt that Electricity North West, which is part-owned by the asset management arm of JPMorgan Chase, the giant American bank, has brought in advisers to conduct a strategic review of the business.

Insiders said that an auction of ENW was likely to begin in the next few months, with the strategic review being handled by bankers at Citi.

A range of infrastructure and pension funds are expected to examine offers for the company, which serves roughly five million customers across a stretch of England from Greater Manchester to Cumbria.

The timing of the sale is intriguing given that JPMorgan Asset Management Infrastructure Investments Group and Colonial First State have owned ENW since 2007.

The threat of possible renationalisation of utility assets by a Labour government has focused minds across the industry, from water companies to gas and electricity providers, although the party’s front bench has not been explicit about whether it would seek to take so-called Distribution Network Operators into public ownership.

One source close to ENW insisted on Tuesday that political considerations had “nothing to do” with the strategic review process.

A sale could fetch well over £2bn, according to City insiders, based on a rough calculation of a typical 30% premium to ENW’s regulatory asset value of £1.7bn contained in its most recent annual results.

That would make it one of the most valuable infrastructure assets to change hands for some time, with a number of other sale processes on hold amid Brexit-related and broader political uncertainty.

ENW employs more than 1,800 people, and its costs account for roughly 16% of a typical domestic electricity bill – equivalent to £79 per home last year, according to its annual report.

Trade unions and other stakeholders are understood to have been informed about the strategic review.

A spokeswoman for ENW declined to comment.

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