Anglo-Canadian Duo Swoops For Eurostar Stake

A consortium of British and Canadian pension and infrastructure funds is poised to swoop on the government's stake in Eurostar in a deal that will raise hundreds of millions of pounds for the Treasury.

Sky News understands that Caisse de Depot et Placement du Quebec (CDPQ) and an infrastructure arm of Hermes, a major UK institutional investor, are close to a deal to buy the government's 40% shareholding.

The deal will be announced on Wednesday, a rail industry source said, although the price was unclear.

The stake was put up for sale last autumn as part of a plan outlined by George Osborne, the Chancellor, to raise £20bn from asset sales by the end of the decade.

Eurostar, which launched its inaugural service in 1994, has seen a surge in demand, with more than 10 million passengers travelling on its trains in 2013 alone.

Among the other bidders for the Eurostar stake were 3i, the private equity firm, a division of the French bank Credit Agricole and an arm of the Singaporean government.

The remainder of Eurostar is owned by SNCF, the French state-owned rail operator, which controls 55%, and the Belgian government.

CDPQ's involvement will mark the latest investment by a Canadian entity in the UK's rail infrastructure.

In 2010, the Canadian pension funds Borealis and Ontario Teachers' Pension Plan paid £2.1bn to take control of High Speed One, the line which runs from London to the Channel Tunnel.

The sale of the Eurostar stake will underline the continuing appeal of UK infrastructure assets to overseas investors despite some suggestions that political uncertainty ahead of the General Election could hamper such deals.

The Treasury declined to comment ahead of its announcement about the deal with CDPQ and Hermes Infrastructure.