Consortium walks from £5bn Severn Trent takeover

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A CANADIAN-LED consortium last night walked away from a tentative takeover offer for Severn Trent after receiving “no meaningful engagement” from the water company’s board.

LongRiver – which consisted of Borealis Infrastructure Management, the Kuwait Investment Office and the Universities Superannuation Scheme – warned on Monday it would end its takeover proposal if Severn Trent didn’t sit down for talks. On Friday, the utility firm’s board rejected a 2,200p-a-share offer, which valued the company at just under £5 billion. The bid was the third to be turned down since the initial approach became public last month.

The bidder said: “LongRiver announced it would not put forward a further proposal for the company in the absence of meaningful engagement. No meaningful engagement between the parties has occurred.

“Having reviewed all publicly-available information on the company, and in the absence of any meaningful engagement with the Severn Trent board, LongRiver will not increase its pre-conditional offer.”

Severn Trent’s chairman,
Andrew Duff, replied: “Throughout the course of this process, we and our advisers have held talks with, and given careful consideration to every proposal made by, the consortium.

“We have consistently made clear to the consortium our belief that Severn Trent has a value to our shareholders above the level it indicated it was willing to pay. This difference in value has been at the heart of this process and the consortium has either not been able, or willing, to bridge that value gap.”

Shares in Severn Trent dipped by 0.5 per cent to close down 9p at 1,937p, valuing the utility firm at about £4.6bn. LongRiver’s statement came after trading had ended.