SSE could be eyed by Vattenfall if latter loses out in Nuon auction, sources say

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Vattenfall may consider bidding for Scottish and Southern Energy (SSE), the UK-listed utilities group, should the former’s bid for Nuon fail, sources told dealReporter.

A source familiar with the Swedish energy company’s strategy said Vattenfall would likely look to SSE as an alternative to the for-sale Dutch target.

A source familiar with the Nuon sale process said that such a move could not be ruled out on Vattenfall’s part. SSE has long been seen as a target for various parties, the source said. Furthermore, Vattenfall has remained active in various situations and has long eyed the UK market. The source added that if Vattenfall is not selected as Nuon’s preferred bidder, a bid for a UK player is a logical alternative.

A Vattenfall source meanwhile identified the Netherlands and the UK as two core markets, in which major buys would be considered. The company source declined to name specific targets, but reiterated Vattenfall’s active interest in Northwestern European expansion.

Vattenfall declined to comment. SSE was unavailable for immediate comment.

Another company source had previously told this news service that Vattenfall would likely spend between EUR 5bn-EUR 10bn on a major transaction.

A UK-based industry source said Vattenfall had seriously examined bidding for SSE two years ago. An analyst report had mentioned Vattenfall as a potential third party to a nuclear new-build joint venture with Spain’s Iberdrola and SSE. He predicted that while Vattenfall would likely make a cash bid, the Stockholm-based group might also seek top-up financing.

The industry source also noted that SSE has considerable additional debt capacity. An acquirer would therefore not be likely to have to re-finance the Scots company’s debt, he said.

SSE has a market cap of around GBP 11bn.

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