Goldman Sachs and Allianz plan Yorkshire Water bid

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GOLDMAN Sachs, the US investment bank, and Allianz, Europe’s largest insurer, are joining
forces to make a £2bn bid for
a 30 per cent stake in Yorkshire Water.

They are expected to face stiff competition for the shareholding as the Bradford-based utility is highly profitable, although water companies are starting to face greater scrutiny.

Yorkshire Water has come under fire from MPs after paying no corporation tax last year in spite of making £186m in profits and paying dividends of £256m to its investors.

Citigroup is selling 17 per cent of its 37 per cent stake in the business, while fund manager M&G is selling its 13 per cent holding, according to The Sunday Times. Bids are due next month, added the newspaper.

A spokeswoman for Goldman Sachs declined to comment.

A spokeswoman for Yorkshire Water said: “The company does not comment on speculation.”

In a three-year period since being taken private by a consortium of international investors in 2008, Yorkshire Water generated £2.6bn in turnover and £990m in operating profits and yet received a net tax credit of £46.2m, according to the Tory MP Charlie Elphicke.

He singled out the firm for “abusing” the interest deduction system and called on regulators to examine whether water companies are receiving too high a return and if they should be subject to a windfall tax or forced to reduce customers’ bills.