National Grid has commenced an £835 million share buyback programme following the sale of a 61 per cent stake in National Grid Gas Distribution – now Cadent – earlier this year.
The deal, which valued the company at £13.8 billion, saw National Grid paid £3.8 billion in cash and a further £1.8 billion through debt financing by an international consortium of investors.
National Grid has vowed to return £4 billion of the proceeds to shareholders, partly through the share buyback.
The programme will be undertaken in at least two tranches, the first of which began on 2 June and will end on the 27 December 2017 at the earliest. National Grid will purchase up to £425 million of its own shares during this initial phase.
Barclays Capital Securities, as an independent third party, has been appointed to carry out the buy-back on National Grid’s behalf. Shareholders granted authority for the programme to take place at a general meeting on 19 May.
National Grid has retained a 39 per cent stake in Cadent but has agreed to the possible sale of a further 14 per cent on “broadly similar terms” to the original deal. The firm expects to receive £0.8 billion in cash if it proceeds.