Dee Valley bidding war nears conclusion
SEVERN Trent’s protracted bid to secure Welsh water business, Dee Valley looks to be nearing its conclusion.
The Coventry-based utility has been in a bidding war with Ancala over the acquisition of the business.
Ancala had opened the bidding in October at £71.3m before Severn Trent came in with an offer that valued the company at £78.5m.
Ancala responded, going 1p-per-share higher, causing Severn Trent to raise its bid to £84m.
The latter appears to have been the decisive move, with Ancala now saying it won’t be increasing its offer.
The Dee Valley board had withdrawn its support for Ancala and swapped allegiance to Severn Trent after the company upped its offer.
In an update to the markets, Severn Trent said it noted the announcement by Ancala that it would not be increasing its offer – despite being lower than that submitted by Severn Trent.
“The Ancala revised proposal is significantly lower than Severn Trent’s offer,” it said.
It said its offer of 1,825p for each Dee Valley voting ordinary share is 119p higher than the revised Ancala offer of 1,706p.
Severn Trent’s offer of 1,713p for each Dee Valley non-voting ordinary share is 111p higher than the Ancala revised proposal of 1,602p.
“Severn Trent will be a supportive long term owner of Dee Valley as the local water business for its area and will bring its expertise and considerable financial strength to support the business, its customers, employees and pensioners,” it added.
“Severn Trent’s offer has the unanimous support of the Dee Valley board which recommends all Dee Valley voting ordinary shareholders (to) vote in favour of Severn Trent’s scheme at the shareholder and court meetings to be held on January 12, 2017 and all Dee Valley non-voting ordinary shareholders accept the Severn Trent contractual offer.”
It said Dee Valley shareholders should take no action on the Anacala proposal in order to benefit from Severn Trent’s revised offer.
Ancala has received almost 41% of acceptances from Dee Valley shareholders. The vast majority of these acceptances were obtained from shareholders who had signed irrevocable undertakings to accept Ancala’s offer on October 20, 2016, prior to Severn Trent submitting its first offer.
Severn Trent’s offer will be approved if 75% or more of shareholders vote to accept the offer at the general meeting.
