"Following these transactions CKI and HKE will retain ownership of the CitiPower corporate entity and its electricity distribution business," Origin said in a statement to the stock exchange.

According to Origin, the business comprises of 260,000 residential and small business customers in Melbourne's CBD and inner suburbs as well as 4,000 large commercial and industrial customers throughout the eastern seaboard.

"The acquisition complements Origin's other business activities in southeastern Australia. These include gas-fired power generation and developments of the BassGas Project delivering gas, oil and LPG into Victoria, the Thylacine and Geographe gas fields in the offshore Otway Basin and the SEA Gas pipeline from southwestern Victoria to Adelaide," the company said.

In other energy news, speculation is rife that Hong Kong power giant CLP Holdings is expected to bid as early as next week for at least one of the Australian power stations put up for sale by US-owned energy group NRG Energy.

Bids for NRG's 37.5% stake in the 630 megawatt Gladstone power station in Queensland and wholly owned 760MW Flinders plant in South Australia are expected to close on Monday.

CLP bought a majority stake in the Yallourn power station in Victoria in December 2000 and has made it clear to Hong Kong investors that it is keen to buy more Australian power stations. "We see Australia as an attractive market," said CLP group marketing director Irving Koo.