Severn Trent rejects £5.3bn offer from consortium
The water utility’s board voted unanimously against the £22-a-share offer from the LongRiver consortium last night, having already rebuffed a £21.25 offer on Monday.
Andrew Duff, Severn Trent’s chairman, said: “We have held private conversations with LongRiver and made clear that we have no objections to fuller discussions in the event that LongRiver puts forward a proposal which properly reflects the long term value and future potential of Severn Trent.”
A spokesman for LongRiver said it was “surprised” by the rejection and had had no discussions with the Severn Trent board this week. LongRiver announced its revised offer on Friday afternoon and said it was conditional on the recommendation of Severn’s board.
In a statement on behalf of LongRiver, Michael Rolland, president of Canada’s Borealis, said the offer represented “certain and compelling value for Severn Trent shareholders”.
He said: “We look forward to engaging with the Severn Trent board to enable us to make our formal offer to Severn Trent shareholders. Without engagement there can be no offer from the consortium.”
LongRiver’s other members are the Kuwait Investment Office and the Universities Superannuation Scheme.
Severn Trent supplies about 4m households in the Midlands and Wales and has debt valued at between £4.3bn and £5.1bn, putting the total value of the offer at about £10bn.