Consortium ready to pull plug on £5.3bn bid to buy out water giant

LongRiver has until 5pm today to table another offer but insists there will be no new proposal without “meaningful engagement” with Severn’s board.

The consortium, which is led by Canadian investment group Borealis, was spurned for a third time on Friday evening after tabling a revised proposal worth 2200p a share – a valuation which was still deemed too low by the Severn board.

Borealis chief executive Michael Rolland said there had been no discussions since the consortium first submitted a proposal to Severn on May 14.

He said: “The Severn Trent board has shown no interest in discussing our pre-conditional offer with us.

“In the absence of any such engagement, there will be no further proposal from the consortium and no offer for Severn Trent shareholders to consider.”

Severn, which supplies 4.2 million households and businesses including customers in Rotherham, Sheffield and Scunthorpe, said LongRiver’s proposals failed to recognise its long-term value or future potential.

It has been reported that an increase of around 40p a share would be enough to bring Severn to the table, although LongRiver is determined that there must be a meeting with the water firm’s board before any move can take place.

Under Takeover Panel rules, LongRiver must decide whether to put in a new, fourth offer before the expiry of today’s “put up or shut up” deadline or walk away.

British water companies are prized by investors such as pension funds, sovereign wealth groups and private equity firms for their monopoly over customers and relatively stable earnings, which are tied to inflation.

Severn is the latest British utility to attract interest after buyouts for rivals 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.