LONDON: British water firm Severn Trent has rejected a raised $8.2bn takeover bid, with a deadline for the suitors to make a formal offer fast approaching.
The LongRiver consortium — made up of a Kuwaiti sovereign wealth fund, Britain’s Universities Superannuation Scheme and Borealis Infrastructure, part of Canadian pension fund OMERS — made a £2,200 per share cash offer for the water utility on Friday.
Late on Friday after the market close Severn Trent rejected the proposal, saying it failed to reflect the long-term value and future potential of the company, which has 7.7 million customers mainly in central and western England and Wales.
Britain’s water and sewerage firms have long attracted interest from yield-hungry investors, drawn by their stable cash flows and a favourable regulatory structure.
Seven of the country’s ten water companies are now in the hands of private investors, with Pennon Group, United Utilities and Severn Trent the remaining listed entities.
The offer was the third in a month the consortium has made, up from an earlier 2,125 pence per share bid which Severn Trent rejected on June 3.
Investors said last month they would consider selling for 2,300 pence or more, although one top 20 investor said on Friday that the 2,200 pence price was “very fair”.
Reuters
