Kelda accepts £3bn bid by consortium
YORKSHIRE Water's parent company Kelda has confirmed that it is to be bought by a consortium of investment firms for £3bn.
The announcement follows days of speculation after Kelda revealed it had been approached last week.
Shareholders will receive 1,090 pence a share from the consortium made up of Citigroup Alternative Investments, GIC Special Investments, Infracapital Partners and HSBC.
Kelda also announced an interim dividend of 10.65 pence a share for the six month to September 30.
Kevin Whiteman, Kelda's chief executive declined to say whether Kelda had received any counterbids, but confirmed that the deal included around £2bn of debt.
He said: “This offer is good for customers, employees and shareholders. The members of the consortium are highly credible institutions and, as investors, are taking a long term perspective on our business with a view to continued delivery of
excellent service levels to customers, and opportunities for our employees.
“At the same time, the offer represents excellent value for shareholders.”
Kelda provides water and waste water services to customers in the UK, employing over 3,000 people.
Yorkshire Water is Kelda's main subsidiary, providing water and waste water services to more than 4.7 million people and 140,000 businesses.
Kelda's principal non regulated business, Kelda Water Services, focuses on water, waste water and business services.
Confirmation of the bid's acceptance comes on the day that Kelda announced its half-yearly results for the six months ended September 30.
Group revenue was up 5.6% compared to the same period last year from £411.7m to £434.9m, of which Yorkshire Water's regulated business contributed 90%. Operating profit increased by 9.8% to £184.4m.
Adjusted earnings per share (excluding deferred tax) rose 19.6% from 27.1p to 32.4p.
Kelda said that the increase in profitability reflected the underlying strength of the group's core business of Yorkshire Water and steady organic growth in Kelda Water Services.
The increase in Yorkshire Water's profit reflects the 7.9% tariff increased coupled with continued efficiency savings.
Customer service also remained high with the number of written complaints falling to 23 per 10,000 customers compared to the average number across all water companies of 80 per 10,000.
Yorkshire Water is the only utility not to have been out of the top four water companies since 2001 and earlier this year confirmed its enviable reputation with a top two ranking from regulator Ofwat.
However, Kelda admitted that Yorkshire Water had faced a difficult summer, with poor weather and flooding affecting operational assets across the region.
The financial impact of bad flooding caused by heavy rains in July is expected to be substantially mitigated by insurance.
