CMA clears Severn Trent to acquire Dee Valley
MARKETS watchdog, the CMA, has cleared the acquisition by Severn Trent of Welsh water group Dee Valley.
The Midlands utility splashed out £84m to acquire the business earlier this month after getting involved in a bidding war with Ancala.
The Dee Valley board said it had recommended the final bid for approval by its shareholders.
Due to the nature of the acquisition, the CMA said it needed to review the deal but it has now said it is satisfied with the terms.
The Dee Valley board said in a statement today that it noted the decision.
Severn Trent said it welcomed the CMA’s decision, saying it was the first merger of water companies to achieve clearance under the new special water merger regime.
Liv Garfield, CEO of Severn Trent, said: “I am obviously delighted that today’s unequivocal announcement by the CMA confirms that the Severn Trent offer for Dee Valley can proceed without further regulatory investigation or approval. For all the reasons we have previously set out we absolutely believe Severn Trent will be the best supportive owner of Dee Valley.”
However, Ancala has not yet given up the fight. It said it had received 41.13% shareholder approval for its own offer, which would remain open until December 29.
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.
Spence Clunie, managing partner of Ancala, said: “By extending the revised Ancala bid we are ensuring that Dee Valley shareholders have a viable option which is deliverable, is free from any regulatory doubt and which, we believe, provides the best outcome for the company.”
Severn Trent said it noted Ancala’s announcement of the extended closing date.
However, it said the offer (1,706p) had not increased and the vast majority of the acceptances had been obtained from shareholders who had already signed irrevocable undertakings to accept Ancala’s original offer, which was made before Severn Trent entered the fray.
