National Grid confirms KeySpan bid

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The Independent Online

The British company said that any transaction would be on an all-cash basis, satisfied wholly from borrowings. National Grid shares closed up 3 per cent at 613.5p.

Fraser McLaren, an analyst at ING, said: "In the current environment of M&A activity, the market is likely to interpret this move positively - aside from the potential creation of synergies from the combination with NG's existing utility operations in the region, it would also help to solve the company's earnings growth gap beyond 2006.

"National Grid has a good track record in its US operations."

KeySpan owns gas utilities in New York, Massachusetts and New Hampshire and would fit well with National Grid's US business, which is also focused in the US north-east.

National Grid, led by its chief executive, Roger Urwin, said: "These discussions are yet to be concluded and that there is no certainty that they will lead to any definitive agreement."

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