Owner of the UK’s gas and electricity transmission networks National Grid unveiled plans to spin off its broadcast and mobile phone mast business into a separate company that could be worth up to GBP 3 billon. The demerger of the masts business, which hosts television and mobile transmitter equipment, is the second major disposal to be carried out by National Grid following the flotation of its Energis telecoms network in 1997. The announcement was made during the presentation of the compsany’s financial results for the six months ending 30 September. During that period the operating profit from Wireless infrastructure was up 17 percent at GBP 42 million compared with GBP 36 million in the prior period. This performance was principally driven by additional broadcast channel revenues following sales of capacity to ITV and Channel 4 in the second half of last year. The business remains well positioned for double digit profit growth.

Steve Holliday, the chief executive-designate of National Grid, said at the presentation that it had decided to demerge rather than float the masts business precisely because of what happened to Energis, which was caught by the meltdown in the telecom sector in 2000 destroying the value of National Grid’s remaining stake. The demerger is expected to take about six months to complete, although National Grid is open to offers from private equity buyers. The decision to sell the business came as a shock since National Grid only beefed up its masts division two years ago with the GBP 1.1 billion purchase of Crown Castle, which specialises in broadcast transmission. It has since invested about GBP 100 million in the business. Mr Holliday said that the board had decided the masts division was too small, accounting for only 3 percent of the company, and was a distraction from its main gas and electricity transmission business.