The Sunday Times reported that the group of Canadian, British and Middle Eastern investors approached industry veteran and Balfour Beatty chairman Philip Aiken to lead the bid, as the competition heats up ahead of the deadline later this month.
Australian engineer Aiken is a non-executive director of software firm Aveva and Newcrest Mining. He stepped down from the board of National Grid last year.
National Grid's auction of a majority stake in its gas distribution business, announced in November, is tipped to be one of the biggest UK infrastructure deals of this year. It will also act as a litmus test for appetite among foreign investors following the UK's vote to leave the European Union in June.
Aiken would spearhead a consortium including Canada Pension Plan Investment Board, the Universities Superannuation Scheme for British academics, fund manager Hermes, and sovereign wealth funds from Kuwait and Abu Dhabi.
The rival group is made up of insurer Allianz, sovereign wealth fund China Investment Corporation, and fund managers Dalmore Capital and Amber Infrastructure.
China’s State Grid is also reportedly interested in the sale. Last month, Australia blocked it from taking a controlling stake in its largest energy network Ausgrid amid "national security" concerns.
National Grid's gas business owns 82,000 miles of pipeline, and delivers gas to nearly 11 million customers. It has put a 51 per cent stake up for sale, but could offload more.