National Grid’s planned spin-off of its Wireless operations, estimated to be worth at least £1.5 billion, will spark great interest from private equity firms and investment banks.

Cashed-up investors have fought intensely for utility assets such as Thames Water and Anglian Water, while communications companies have also been hot property.

Following a strategic review, National Grid's focus will now move solely to UK and US energy.

It is looking to demerge its wireless infrastructure by the second quarter of 2007. A demerger would allow shareholders to retain an interest in the operation although it has indicated other offers will be considered.

The utility bought Crown Castle's broadcast towers in mid-2004 for a well-priced £1.1 billion, and this allowed National Grid to treble the size of its portfolio to about 5000 towers. Customers include BBC, BSKyB, ITV and Channel 4 as well as mobile phone operators.

Utility analysts view the move as prudent as it will allow the group to focus on its core businesses, which drove today's forecast-beating 12 per cent rise in pre-tax profits. A $1.9 billion (£1 billion) share buyback was also unveiled.

As a result, the stock was up nearly 7 per cent on this afternoon. This comes on top of the 25 per cent increase already achieved in the past six months.

Citigroup values the wireless business at £1.51 billion, but this is likely to be a little modest given the prospect of a bidding war. Potential acquirers could include Macquarie Bank whch owns the rival Arqiva network.

Still, National Grid will be losing strong performed - Wireless's operating profit was up 17 per cent in the first half.

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