Investors in National Grid PLC (LON:NG.) will share £4bn after the energy networks operator agreed to sell a 61% stake in its UK gas distribution business to a group of infrastructure investors for around £13.8bn.
On completion of the disposal, National Grid will receive a payment of £3.6bn in cash from the consortium and will own a 39% minority equity interest in a new holding company owning the business.
In addition, National Grid will receive £1.8bn from additional debt financing.
The FTSE 100-listed group said it will return the capital to shareholders through the combination of a special dividend, together with a share consolidation, and share buy-backs.
It added that at least 75% of the net proceeds are expected to be returned via a special dividend in the second quarter of 2017.
National Grid has also agreed a voluntary distribution of £150mln for the benefit of energy consumers.
John Pettigrew, chief executive of National Grid, said: "Today's announcement follows a highly competitive sale process. It represents an important milestone in the evolution of National Grid and is a good outcome for our customers, employees, and shareholders.
“The consortium has a long-term commitment to the UK with significant experience in owning infrastructure assets, and we look forward to working with them as the gas distribution business continues to deliver a safe and reliable service.”
In morning trading, National Grid shares were up over 1%, or 11.2p at 920.7p.
The consortium buying the gas distribution business stake comprises Macquarie Infrastructure and Real Assets, Allianz Capital Partners, Hermes Investment Management, CIC Capital Corporation, Qatar Investment Authority, Dalmore Capital and Amber Infrastructure Limited/International Public Partnerships.