Lights out for one National Grid gas unit bidder

Jessica Morris
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National Grid's gas unit is expected to fetch £11bn (Source: Getty)

One of the bidders vying for National Grid's gas unit is no longer in the running.

Sky News said last week that a consortium including sovereign wealth funds from Abu Dhabi and Kuwait, as well as pension funds from the UK and Canada, was told that it had failed to make it through to the next phase of the sale process.

The consortium also included Hermes, the Universities Superannuation Scheme and two British pension funds.

Read more: Ofgem warns bidders National Grid gas business earnings are not guaranteed

The £11bn deal is expected to be an early test of Prime Minister Theresa May's new terms for foreign investment in UK critical infrastructure.

Whitehall recently approved the Hinkley Point C nuclear power plant but with revised conditions regarding future ownership changes. It coincided with the announcement of new safeguards for similar deals in the future.

Most of the UK's other major gas distribution pipelines are already owned by international investors.

Bidders from around the world submitted their preliminary offers for a majority stake in National Grid's gas unit last month.

Read more: Government should halt National Grid gas unit sale, union says

Hong Kong billionaire Li Ka-shing, a Chinese consortium including Fosun and the state behemoth China Gas and another led by the Australian bank Macquarie are thought to be bidders.

National Grid has previously said that the "new owner will have to be approved by regulators and operate under the relevant requirements.

"Networks are subject to strict rules and criteria in terms of security reliability and availability and any buyer will need to prove to Ofgem and government that they can meet these criteria."

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