JPMorgan: U.K. Water M&A possible amid regulator review
JP Morgan Chase & Co. said that the possibility for mergers and acquisitions within the UK water sector still exits despite regulatory price review. The low cost debt in the companies had been deemed attractive.
An analyst at JPMorgan said, "Further M&A in the sector cannot be discounted.The recent Borealis approach for Severn Trent (SVT) shows that infrastructure funds are willing to look through the regulatory review."
Last June, LongRiver Partners abandoned its GBP5.3 billion bid for Severn Trent. The former is a group led by Borealis Infrastructure Management Inc. Under local rules, bidders who have abandoned deals cannot return with a new approach within a six month period. Coventry-based Severn Trent is the second biggest traded water company in the UK.
Pennon Group Plc is the third biggest publicly traded water firm in the UK. Today, the shares of Pennon Group increased to as much as 1.9% in London. This was after JPMorgan increased its rating on the stock to neutral.