Ontario Teachers’ Pension Plan Board is emerging as the frontrunner to acquire a stake in SSE Plc’s multibillion-pound electricity networks, people with knowledge of the matter said. 

The Canadian pension fund is negotiating terms of a deal to invest in SSE’s transmission and distribution grid assets, according to the people, who asked not to be identified because the information is private. Several other infrastructure investors that were previously pursuing a deal are no longer in the running, the people said.

London-listed SSE said in November last year it plans to sell about 25 per cent of its transmission and distribution grid units to help fund an increase in spending on net-zero infrastructure. The assets could be valued at more than £10 billion (US$12 billion) in any deal, Bloomberg News has reported. 

The stake sale is part of a strategic plan unveiled by SSE after it rejected a proposal from activist investor Elliott Investment Management to split the company in two by separating the renewables business. 

While discussions are at an advanced stage, there’s no certainty they will reach an agreement, and another buyer could still emerge, the people said. Representatives for Ontario Teachers and SSE declined to comment. 

A consortium backed by Ontario Teachers and Brookfield Super-Core Infrastructure Partners agreed last year to buy SSE’s remaining stake in a Scottish natural gas network for £1.2 billion. Ontario Teachers was also previously a shareholder in SSE’s smart meter venture, which was eventually sold to Equitix.