August 8, 2018 / 1:46 PM / 2 months ago

UPDATE 1-Macquarie considers options for Open Grid Europe gas network -sources

* OGE has RAB of 3 bln eur, may be valued at 4.5 bln euros-sources

* Macquarie to discuss potential OGE sale next month -source

* Co-investors expected to hold on to their stakes -source (Adds details, background)

By Arno Schuetze and Christoph Steitz

FRANKFURT, Aug 8 (Reuters) - Macquarie is considering strategic options for its stake in Open Grid Europe (OGE), Germany’s top gas transmission system operator, three people familiar with the matter said.

OGE could be valued at about 4.5 billion euros ($5.22 billion) in a potential sale.

The deliberations are at an early stage and could result in a stake sale or in Macquarie keeping its shareholding, the people said.

One of the sources said that the investment committee of the Macquarie European Infrastructure Fund 4 (MEIF4) would meet next month to discuss the investment and likely take a decision on its future.

OGE was MEIF4’s first investment, which was followed by acquisitions of gas grids in the Czech Republic and Italy, European wind farms and broadcasting towers as well as hydro power plants and utilities.

No sellside advisers for OGE - which operates a gas network of about 12,000 kilometres (7,500 miles) - have been mandated, the people said, adding that Macquarie may still decide to launch an auction later this year.

German utility E.ON sold OGE in 2012 to a consortium of investors. MEIF4 and the Halifax Regional Municipality Master Trust jointly took a 24.13 percent stake, with MEIF4 holding the vast majority of that (97.7 pct).

Canadian pension fund manager British Columbia Investment Management (32.15 percent), sovereign wealth fund Abu Dhabi Investment Authority (24.99 percent), and German reinsurer Munich Re (18.73 percent) acquired the remaining shares.

At the time, OGE changed hands for 3.2 billion euros. But growing demand for regulated infrastructure assets may result in a much higher price in a potential sale.

In times of ultra-low interest rates and large cash reserves, infrastructure and pension funds have eagerly snapped up power and gas grids, attracted by their mid-to-high single digit percentage returns that are set by national regulators.

Last month, bidders were prepared to put about 1 billion euros on the table for a 20 percent stake in German power network operator 50Hertz, more than former owner Vattenfall received for the complete asset in 2010.

In 2016, Macquarie sold smaller gas network operator Thyssengas at about 1.5 times its regulated asset base (RAB), a key measure to value power and gas grids.

OGE has a RAB of 2.97 billion euros, according to most recent figures on the group’s website, suggesting a potential valuation of around 4.5 billion euros, with Macquarie’s share alone being worth 1.1 billion.

GRTgaz, a French natural gas transmission system operator owned by Engie, has been seen as a potential suitor in the past, the people said, adding that Macquarie would likely also target infrastructure investors, pension funds and sovereign wealth funds if it decides to divest its stake.

One of the people said that OGE’s remaining owners were currently not considering selling their stakes.

Macquarie, British Columbia Investment Management, Abu Dhabi Investment Authority, Munich Re and Engie declined to comment or were not immediately available for comment. ($1 = 0.8626 euros) (Editing by Maria Sheahan and Adrian Croft)

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