LONDON: A consortium led by a Kuwaiti sovereign wealth fund and two pension companies raised its proposed offer for Severn Trent to £5.3bn ($8.2bn) yesterday, sending the British water utility’s share price up by as much as 9 percent.
LongRiver Partners comprising the Kuwait Investment Office, Britain’s Universities Superannuation Scheme and Borealis Infrastructure, which is part of Canadian pension fund OMERS, submitted a conditional cash offer of 2,200 pence for each Severn Trent share to the company’s board.
The offer is inclusive of the final dividend of 45.51 pence per Severn Trent share proposed by the British group’s board on 30 May 2013, and beats an earlier approach of 2,125 pence per share which Severn Trent rejected on June 3 as unreflective of its long-term potential.
A top 20 Severn Trent institutional shareholder said the price was right and expects other big investors to view the offer favourably. “A bid at 22 pounds seems a very fair out-turn,” the investor said.
LongRiver said its offer was conditional on satisfactory due diligence checks on the Severn Trent business and the recommendation of the utility’s board. It also said it was encouraging the board to engage with the consortium before the ‘put up or shut up’ deadline for making a formal offer of 1600 GMT on June 11.
“LongRiver’s proposal of 2,200 pence per share in cash represents certain and compelling value for Severn Trent shareholders,” the consortium said. “We look forward to engaging with the Severn Trent board to enable us to make our formal offer to Severn Trent shareholders. Without engagement there can be no offer from the consortium.” Reuters
