£84m takeover hangs in balance after activists try to block deal

Severn Trent’s £84m takeover of Welsh water group Dee Valley hangs in the balance after an extraordinary twist threatened to block the deal.

The deal requires approval on two measures – by shareholders representing not less than 75% of the shares and by a simple majority of shareholders.

It is the second test that could block the takeover, after 445 recent transfers of small holdings.

Two votes were taken at a meeting convened to approve the Severn Trent offer, which the Dee Valley board had recommended.

The first vote did not include the holders of the transferred shares while the second vote did. In both, it passed on shares held, with 87.20% and 87.18% respectively approving the deal.

However, while the first vote of shareholders was massively in favour – approving the deal 363 to 32 – when the shareholders holding the transferred shares were included this switched to 363 in favour and 466 against.

A meeting on January 25 will now decide which vote is binding.

It is the latest twist in the takeover saga, which was started when Ancala put in a £71.3m bid for Dee Valley in October. Severn Trent came in with a £78.5m bid, which Ancala then raised, before Severn Trent responded with its £84m bid.

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