LongRivers Partners to make new bid for Severn Trent

June 7
11:37 AM 2013

Severn Trent Plc, the United Kingdom's second biggest publicly traded water utility, would receive an improved bid from an infrastructure investor from Canada and the sovereign wealth fund of Kuwait. The new bid is worth GBP5.3 billion or US$8.22 billion.

The new bid is being made by the LongRiver Partners group and is comprised of Kuwait Investment Office, the Univerisities Superannuation Scheme of Britain and Borealis Infrastructure Management Inc. The price offered is at 2, 200 pence per share which includes a final dividend 45.51 pence according to its statement. This is a 34% premium above the closing price for the past six months for Severn Trent's share values.

The water utilities firm is named after two of the biggest rivers in Britain. It is the latest UK utility that is facing a takeover bid from a foreign firm. The buyouts that have occurred include Yorkshire Water Services Ltd as well as Thames Water Utilities Ltd. Both are under the regulatory authority of Ofwat. These utilities firms have offered steady yields for foreign bidders such as KKR & Co., Cheung Kong Infrastructure Holdings Ltd and the Macquarie Group Ltd.

Borealis CEO Michael Rolland said, "LongRiver's proposal of 2, 200 pence per share in cash represents certain and compelling value for Severn Trent shareholders. We look forward to engaging with the the Severn Trent board to enable us to make our formal offer to Severn Trent shareholders."

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