Severn snubs £5bn bid but City feels fresh offer likely
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Severn Trent today rejected a takeover approach worth up to £5 billion from a consortium of foreign investors, saying it “completely fails to recognise the existing and potential value” of the FTSE 100 water supplier. However, the City predicted another bid would emerge.
Canada’s Borealis, the Kuwait Investment Authority and the Universities Superannuation Scheme, a UK pension fund, made the approach for Severn Trent, which supplies water to more than 4.2 million households in the UK, yesterday but the water firm responded that the offer — which had been thought to be up to £23 a share — was “at only a modest premium to the share price before the announcement.”
The share price before the deal emerged was 1820p. The shares slipped today but City analysts predicted the group would return with another offer.
“It is likely that the consortium will make a further offer,” said Peter Atherton at Liberum Capital. “We have seen many such bids in the past decade, and no bidder has ever given up after just one offer. Nevertheless, the [£5.4 billion] price did seem high, especially given where we are in the regulatory cycle.”
The regulated firm could see its prices change next year when watchdog Ofwat announces a new five-year regulatory regime.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments