WATER company Severn Trent has rejected a takeover approach from a consortium of investors because it offered “only a modest premium” to its share price.
The utility firm’s board met representatives from the consortium – which consists of Borealis Infrastructure Management, the Kuwait Investment Office and Universities Superannuation Scheme – on Tuesday.
The board said: “A conditional proposal was tabled by the consortium at only a modest premium to the share price before the announcement of 14 May.
“The board of Severn Trent has reviewed the proposal with its advisers and concluded that it completely fails to recognise the existing and potential value of Severn Trent.
“Accordingly the board has informed the consortium that it has rejected the proposal.”
Reports have suggested that the initial approach valued Severn Trent at £5.3 billion.
Severn Trent, which supplies 4.2 million households and businesses across the Midlands and parts of Wales, is the latest British utility to attract interest after buyouts involving Yorkshire Water, Northumbrian Water and Thames Water.
Borealis already co-owns the UK’s biggest ports operator, Associated British Ports, and the London-to-Paris High Speed 1 rail line. It invests on behalf of thousands of Canadian workers and pensioners.