Late last year the Minister of Energy and Natural Resources Pat Rabbitte threatened to pull the sale of Bord Gáis Energy because poor "market conditions" for energy assets were keeping the price too low.
He held out for a few more weeks and managed to squeeze an extra €120 million out of the eventual buyer, a consortium led by Centrica, which paid a total of €1.12 billion for the business.
A new report on the global energy market from PricewaterhouseCoopers suggests that had he held out a few months longer, he would probably have achieved an even higher price.
The Power and Renewables Deals report, which looks back at 2013 and also muses on the outlook for this year, confirms Rabbitte’s assertion that last year was a bad one to sell energy assets. The report is focused on infrastructural assets as opposed to retail businesses such as BGE, but it still makes for interesting reading.
Globally, there were $141 billion worth of deals in the sector in 2013, which was down 10 per cent on the previous year. Europe also fell out of vogue with energy asset investors last year, although almost half of the 30 or so $1 billion-plus deals took place in the European market.
The total value of deals in Europe was down 16 per cent to $43.7 billion.
Looking ahead, PWC predicts that fresh impetus from cash-rich Asian investors, as well as demand from long- term buyers such as pension funds, will drive activity levels and prices back up.
It also predicts that a number of potential “mega mergers” among power companies in the US could also add impetus to global demand for energy assets.
Is there anything in all of this for Ireland?
The Government has asserted that it will not sell off the country’s gas or electricity networks. With the departure of the troika, that seems unlikely to change anytime soon.
Back in 2011, however, Rabbitte floated the idea of selling off a 25 per cent stake in ESB, wires, pipes and all, to fund job creation and debt paydown.
With global demand and asset prices rising, 2014 might not be a bad year to revive the plan, on paper.
But with an election due in 2015 or 2016, on paper is where the plan is likely to remain.
