Severn Trent suitor pulls plug on takeover bid in a row over the group’s value
THE foreign consortium bidding to take over Midland-based utility Severn Trent has confirmed it is withdrawing from the deal and will not be submitting any fresh offer.
LongRiver Partners – a consortium led by Borealis Infrastructure Management Inc, and including the Kuwait Investment Office and Universities Superannuation Scheme – had hinted it could be on the verge of quitting after its latest £5.3bn offer for the water company was rejected by its board.
The partnership said it was disappointed by the speed of which its latest offer on Friday was dismissed and by the Severn Trent board’s reluctance to enter into talks over a deal.
In a statement to the London Stock Exchange the partnership said: “On June 10 LongRiver announced that it would not put forward a further proposal for the company (Severn Trent) in the absence of meaningful engagement. No meaningful engagement between the parties has occurred.
“Having reviewed all publicly available information available to it on the company, and in the absence of any meaningful engagement with the Severn Trent Board, LongRiver will not increase its pre-conditional offer.”
In a counter statement, Severn Trent said its board had set out clearly in its announcement of June 7 that LongRiver’s conditional proposal of 2,154.49p per Severn Trent ordinary share, plus the already announced final dividend of 45.51p per share, did not reflect the true value of the business.
It said LongRiver’s revised proposal represented a 10p increase on its first bid but nothing had changed to convince the Severn Trent board that shareholders were getting true value.
The water company’s board said that throughout the bidding process it had always been open to discussions provided a realistic was forthcoming.
Andrew Duff, Severn Trent chairman, said: “Throughout the course of this process we and our advisers have held talks with, and given careful consideration to every proposal made by the consortium.
“We have consistently made clear to the consortium our belief that Severn Trent has a value to our shareholders above the level it indicated it was willing to pay. This difference in value has been at the heart of this process and the consortium has either not been able, or willing, to bridge that value gap.
“We have every confidence in the long-term future and significant value of Severn Trent and look forward to continuing to deliver for all of our shareholders, customers and other stakeholders.”
