Centrica shares up on takeover speculation

Updated 12.32 Mon Jun 11 2007

Keywords: Gazprom, British Gas, Centrica

Shares in Centrica have jumped more than 4 per cent after Russian gas giant Gazprom said it is close to concluding a deal in the UK.

Gazprom, which already supplies 2,000 UK businesses, has expressed an interest in the British Gas owner as it looks to build its share in international energy markets.

"In the near future there will be a deal to further increase the customer base on the British market" - Alexander Medvedev

Gazprom chief executive Alexander Medvedev told reporters at an economic conference in St Petersburg: "In the near future there will be a deal to further increase the customer base on the British market.

"Anyone who will be in London for the Wimbledon tennis tournament will know about it."

While Gazprom has the financial muscle to buy Centrica it would have to overcome concerns about a Russian firm owning such a large share of the UK market.

Gazprom has been signing up business customers in the UK since it bought Pennine Natural Gas last year. It also owns part of the Cheshire-based company NGSS.

The Russian market is less open to foreign ownership than the UK market. The holding back of supplies to neighbouring countries and the repatriation of natural resources by Russia has also sparked concerns.

Neither Centrica nor Gazprom was available for comment.