Citigroup analysts said the big six firm, which already owns major electricity distribution assets, is a potential buyer after the company “expressed interest” in the sale in an investor conference following its latest financial results.
SSE also holds a 50 per cent stake in Scottish gas distribution company SGN, which also holds licenses in the south of the country.
“In our view, it is plausible that SSE could look to participate in such deal (together with a financial buyer), assuming National Grid does not look to retain full operational control of the asset. If this were to be the case, we believe SSE would require a rights issue to fund such deal,” Citi analysts said in a note on Tuesday morning.
A spokesperson for SSE said the company “naturally monitors all developments across the energy sectors in Great Britain and Ireland but won’t comment on any speculation relating to them.”
National Grid confirmed earlier this month that it will move ahead with the sale of a majority stake in its gas distribution businesses within the final months of this financial year, with a close by early 2017.
At the same time finance director Andrew Bonfield told Utility Week that the “usual suspects” are likely to show interest.
Bonfield said it is “too early to speculate” on who might take a stake in the assets but acknowledged that infrastructure funds, sovereign wealth funds and existing networks companies are all “a possibility”.
He added that National Grid intends to sell a stake in the four gas distribution networks rather than separate the assets because there are “synergies which benefit customers” in keeping the assets together.
“We’d hope for as much competition as possible,” he said.
The sale is expected to bolster National Grid’s already strong asset base profile, in a boon for shareholders.
The transmission operator posted a 22 per cent increase in its earnings per share over the first half of this financial year, beating analyst expectations by 14 per cent.