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Npower sells 770,000 customer supply accounts | Npower sells 770,000 customer supply accounts |
(about 3 hours later) | |
The energy firm Npower is selling 770,000 of its electricity and gas customer accounts to Telecom Plus. | The energy firm Npower is selling 770,000 of its electricity and gas customer accounts to Telecom Plus. |
Telecom Plus, which uses the Utility Warehouse brand name, will see client numbers more than double to 1.2 million. | Telecom Plus, which uses the Utility Warehouse brand name, will see client numbers more than double to 1.2 million. |
Customers with Energy Plus and Gas Plus accounts are being told they will see no change in services. | Customers with Energy Plus and Gas Plus accounts are being told they will see no change in services. |
Npower, which will gain £218m from the sale, will still have 4.6 million customer accounts. | Npower, which will gain £218m from the sale, will still have 4.6 million customer accounts. |
The sale is subject to approval by Telecom Plus shareholders and the Office of Fair Trading. | The sale is subject to approval by Telecom Plus shareholders and the Office of Fair Trading. |
Npower said it expected to complete the sale by January next year. | Npower said it expected to complete the sale by January next year. |
'Big seven' | 'Big seven' |
Shares in Telecom Plus were up 14% as markets opened in London on Wednesday, making it one of the top percentage gainers on the London Stock Exchange. | Shares in Telecom Plus were up 14% as markets opened in London on Wednesday, making it one of the top percentage gainers on the London Stock Exchange. |
Npower boss Paul Massara said Britain was "well on its way to having a big seven rather than a big six". | Npower boss Paul Massara said Britain was "well on its way to having a big seven rather than a big six". |
He said: "In one move we have helped to create the biggest independent competitor in Britain's household energy supply market." | He said: "In one move we have helped to create the biggest independent competitor in Britain's household energy supply market." |
"This is good for competition and good for consumer choice." | "This is good for competition and good for consumer choice." |
Telecom Plus's executive chairman, Charles Wigoder, said: "This is a transformational deal for the company, delivering significant earnings enhancement, a revised and improved twenty year supply agreement with Npower and the opportunity for us to provide even more competitive energy prices to our customers in future." | Telecom Plus's executive chairman, Charles Wigoder, said: "This is a transformational deal for the company, delivering significant earnings enhancement, a revised and improved twenty year supply agreement with Npower and the opportunity for us to provide even more competitive energy prices to our customers in future." |
Since the start of October, more than 150,000 people have switched themselves to smaller energy firms amid a spate of price rises from five of the "big six" energy and gas firms and political debate about how the firms set prices. | Since the start of October, more than 150,000 people have switched themselves to smaller energy firms amid a spate of price rises from five of the "big six" energy and gas firms and political debate about how the firms set prices. |
Small energy firms account for about 3% of the market. | Small energy firms account for about 3% of the market. |
Neil Shah, analyst at Edison Investment Research, said the acquisition was a major strategic move for Telecom Plus. | |
He said: "With some reinvestment in price, the company is now even better placed to take advantage of consumer discontent around the big six." |