London to battle US for Octopus spin off: Energy large’s tech unit Kraken valued at £6.4bn forward of bumper inventory market itemizing

Octopus Energy’s plan to spin off its technology business has sparked a transatlantic battle for a bumper stock market listing.

The boss of Britain’s largest domestic energy supplier said there was ‘every chance’ Kraken would float – and it would be a choice ‘between London and the US’.

It comes after Octopus agreed to sell a £740million minority stake in Kraken to a syndicate of investors including D1 Capital Partners, Fidelity and a unit of the Ontario Teachers’ Pension Plan. 

The deal valued Kraken at £6.4billion – enough to see it join the FTSE 100 index should it list in London. Octopus will retain a 13.7 per cent stake in Kraken once it has been de-merged.

Kraken sells AI technology to energy companies to help them to manage customer billing, smart meters and electric vehicle charging. 

It connects more than 70million household and business energy accounts through clients including EDF and TalkTalk, as well as Octopus.

Float: Octopus chief exec Greg Jackson (pictured) said London would be his preferred location for a listing – but gave no assurances

A share listing in London would be a major boost for the City amid signs of a stock market revival following a dearth of so-called ‘initial public offerings’ (IPOs) in recent years.

Octopus chief executive Greg Jackson yesterday told BBC Radio 4’s Today programme: ‘For large tech companies such as Kraken, it’s going to be between London and the US.

‘I really hope it’s London. The thing about Kraken is we’ve got this global investor base. And so really the stock exchanges have got to show why they are the right one for a business like this.’

Talk of a float came as Octopus posted a £260.1million annual loss for the year to April 30 as it said an ‘exceptionally warm spring’ hit demand for gas and electricity to the tune of about £103million.

Dan Coatsworth, head of markets at AJ Bell, said Britain’s stock market was ‘crying out for something like Kraken – a British tech business going places’.

But he said the City may have a ‘tough job’ convincing the board not to opt for the US, adding: ‘The syndicate of investors who have just bought a slice of Kraken includes three big names based in North America and they will be fully aware of the valuation differential between the UK and US stock markets.’