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Severn Trent has rejected a £5.3 billion preliminary approach from Canadian and Kuwaiti investors, saying it was undervalued.
The water firm said the conditional proposal was “only a modest premium to the share price” before the announcement of the approach was made public yesterday.
“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,” the company said.
News of the approach had increased Severn Trent’s share price by 14 per cent and although pricing details of the approach were not disclosed any concrete bid would be priced around £22 or £23.
The consortium led by Canadian infrastructure investor Borealis, the Kuwait Investment Authority and the Universities Superannuation Scheme will now have until 11 June to make another offer to the water firm.
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