Severn Trent unveils takeover approach from Borealis-led group

UK water and waste water treatment firm Severn Trent Plc (LON:SVT) today announced it had been approached with a takeover proposal by a group that includes Canada’s Borealis Infrastructure Management Inc, thus confirming recent press speculation.

Severn Trent said in a statement that Borealis, the Kuwait Investment Office and the UK’s Universities Superannuation Scheme Ltd are considering making an offer to buy the company. The water utility stressed there was no certainty that the consortium would make a firm bid as the approach is at a very early stage.

Earlier, Magazine Financial News quoted two sources as saying that Borealis and the Kuwait Investment Office could propose to pay between £22.50 ($34.44/€26.49) and £23.00 per share, or around £5.3bn in total.

According to Liberum analysts cited by Reuters, it would be risky for the suitors to pay such premium in year three of the five-year regulatory cycle for one of the three remaining public UK water firms.