Severn Trent rejects £5.3bn takeover approach
WATER utility Severn Trent has rejected initial takeover approaches from an international consortium of investors claiming the bid fails to place sufficient value on the business.
The Coventry firm, which supplies water to more than 4m households in the Midlands, said it had met with the consortium comprising Canada’s Borealis Infrastructure Management Inc, the Kuwait Investment Office and Universities Superannuation Scheme Ltd for the first time yesterday.
In a statement today, Severn Trent said: “At that meeting, a conditional proposal was tabled by the consortium at only a modest premium to the share price before the announcement of May 14. The board of Severn Trent has reviewed the proposal with its advisers and concluded that it completely fails to recognise the existing and potential value of Severn Trent.
“Accordingly the board has informed the consortium that it has rejected the proposal.”
Although no figures have been officially released, reports yesterday suggested the proposal was likely to value the company at around £5.3bn.
The consortium, which is supposedly being advised by Deutsche Bank, is thought to have based its offer on a price of £23 a share.
Borealis is the infrastructure arm of the Ontario Municipal Employees Retirement System, while the Kuwait fund was set up to manage the Kuwaiti government’s overseas investment strategy.
