Npower chief executive officer Paul Massara has said Britain is "well on its way to having a big seven rather than a big six" energy sector after selling its electricity and gas subsidiaries to smaller rival.
The £218 million deal sees Telecom Plus, a supplier of energy and telephone services trading as Utility Warehouse, buying npower’s energy subsidiaries. The two have also agreed a wholesale deal in which npower will supply Telecom Plus for 20 years.
The utility’s shares leapt by 14%, rising 208.40p to 1,715.40p.
“In one move we have helped create the biggest independent competitor in Britain’s household energy supply market... Britain is well on the way to having a Big Seven rather than a Big Six,” said Massara.
“This is a transformational deal for the company,” added Telecom Plus’s executive chairman Charles Wigoder.
Meanwhile, the company’s chief executive, Andrew Lindsay, said his existing electricity and gas retail business had gained from the bad publicity surrounding the recent price hikes announced by the Big Six energy providers.
He added: “The anticipated acquisition of our own energy supply licences from npower enabled us to keep our recent price rises significantly below the average of those which had previously been announced by the Big Six”.
The deal will be partly financed through a £130m share placing underwritten by Peel Hunt and borrowings. Telecom Plus also reported a 10% rise in first-half profit and raised its interim dividend by 23%.Reuse content