Telecom Plus to buy two energy units from RWE Npower for $351 million
(Reuters) - British multi-utility provider Telecom Plus Plc (TEP.L) said it had agreed to buy two energy supply units of RWE Npower for 218 million pounds ($351 million), in a bid to improve energy margins and offer more competitive tariffs.
Telecom Plus' stock jumped more than 13 percent, making it the second biggest percentage gainer on the London Stock Exchange on Wednesday morning.
The deal also ensures a 20-year supply contract with the British arm of German utility RWE AG (RWEG.DE), said Telecom Plus, which provides gas, electricity, fixed-line telephone and broadband internet services.
The company, which owns and operates the Utility Warehouse brand, said it would raise about 130 million pounds in share placings, fully underwritten by Peel Hunt.
Telecom Plus said the purchase of Electricity Plus and Gas Plus would be financed through a combination of the share placements and about 100 million pounds from loan facilities.
The acquisitions are expected to materially increase earnings within a year of completion. The deal is expected to close by late December, the company said.
Telecom Plus also posted a 10 percent rise in first-half adjusted pretax profit and raised its interim dividend by 23 percent.
Shares in Telecom Plus Were up 13.5 percent at 1710 pence at 0820 GMT (3:20 EDT).
($1 = 0.6210 British pounds)
(Reporting by Richa Naidu in Bangalore; Editing by Gopakumar Warrier)