FTSE 100 company National Grid PLC (GB:NG) divested an additional 20% stake in National Gas to a consortium of investors led by Macquarie Asset Management for £700 million. The company’s shares experienced a positive uptick yesterday, increasing by more than 2.5%. This comes after a slight decline of approximately 6% over the last three months.
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National Grid is a UK-based utility company that manages the safe supply of gas and electricity for its customers.
The Details
The deal is under the same financial terms as the initial 60% transaction completed in January. With this transaction, National Grid has offloaded 80% of its stake and also established a new option agreement with the consortium, potentially leading to a complete acquisition of National Gas.
The transaction valued the company’s UK gas transmission and metering business at approximately £9.6 billion in terms of enterprise value.
National Grid’s CEO, John Pettigrew, commented on the deal, ‘We’re pleased to reach the next milestone in this process, and we’ll continue to work closely with the consortium.”
Is National Grid a Buy, Sell, or Hold?
The company holds a dominant position in the energy distribution sector in the UK, and as a result, it is a secure stock among investors, along with stable dividend income.
Analysts are bullish on this transaction as it emphasizes the role of National Grid in the UK’s energy structure. After the announcement, analyst Pavan Mahbubani from J.P. Morgan reiterated his Buy rating on the stock, forecasting a growth rate of 22.3% in the share price.
On TipRanks, NG stock has a Moderate Buy rating based on four Buy and six Hold recommendations.
The average target price of 1,157.4p implies an upside potential of 11% on the current trading price.
