Centrica targets another Enron asset as it raises £420m to fund acquisitions

Centrica, the services group which includes British Gas and the Automobile Association, is raising £420m through a share placing to fund further acquisitions including another part of the collapsed Enron empire.

Centrica said yesterday that it is in talks to buy the New York-quoted NewPower Holdings in which Enron holds a 41 per cent stake. The deal would be worth about £93m.

Centrica has already bought Enron Direct, the UK energy business, which services business customers, for £98m. And it recently announced the £437m acquisition of Enbridge, a Canadian company which leases water heaters.

Roy Gardner, Centrica's chief executive, said the prospect of the NewPower deal was "indicative of the accelerated opportunities we are seeing now". The share placing was necessary to ensure Centrica could take advantage of these opportunities and move swiftly, he said.

The deal would take Centrica's US customer numbers from 3.7 million to 4.3 million, closer to the group's 10 million target.

Mr Gardner, who also chairs Manchester United, reiterated his ambition to move into the water sector following the collapse of Centrica's talks to buy Southern Water from ScottishPower. However, he said Centrica would only want to acquire water customers and was not interested in buying infrastructure businesses. He added that "the regulator has no problem" with Centrica adding water to its other utility operations, which span gas and electricity. Other targets could include Enron's Wessex Water customers.

Centrica admitted that it would lose customers at its British Gas operation following the recent 5.3 per cent price rise. Mr Gardner said he expects to see reductions followed by stabilisation.

Centrica's pre-tax profits for the year to 31 December were up 10 per cent to £468m, after exceptional charges of £166m. Operating profits were up to £679m from £526m. Centrica shares fell 4p to 215p.