Court ruling unblocks Severn Trent takeover bid
The High Court has ruled in favour of Severn Trent’s prolonged takeover of Dee Valley, blocking the attempts of an activist shareholder to flood the voting process with opposition.
The proposed £84m takeover of the Welsh water group required shareholder approval on two measures – by shareholders representing not less than 75% of the shares and by a simple majority of shareholders.
It was the second test that created the blockage in the takeover, after one shareholder made 445 recent transfers of small holdings.
At a meeting last month two votes were taken, with the first vote not including the holders of the transferred shares while the second vote did.
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.
The High Court has backed the decision by Dee Valley chairman Jon Schofield to ignore the votes by the new shareholders, and has sanctioned the Severn Trent acquisition.
However the court has adjourned until tomorrow, pending any application to appeal.
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.