Citigroup consortium in £3 billion Kelda bid

Source: Exec Digital UK

Date :23/11/2007 08:55:55

Kelda the owner of Yorkshire water has received a £3 billion takeover offer from a consortium of infrastructure funds.

The approach made by the consortium of Citigroup Infrastructure Investors, GIC Special Investments and HSBC was confirmed after Kelda’s share price soared 13 percent to £10.60.

The consortium is offering £11.65 a share for the UK’s third biggest water company. It is also proposing that shareholders retain any proposed first-half dividend.

Analysts said Kelda was attractive as it has one of the best efficiency ratings of all the water companies.

Over the past three years, the company has remained in the top two of the performance league tables for water companies.

Utility investment

It is understood that the consortium has been in talks with the company for some time and that a deal could be made as early as next week.

The company is the latest utility to attract interest from investors. Last year Thames Water, Britain's largest water company was acquired by Australian investment firm Macquarie in a deal that gave it an enterprise value of £8 billion.

That was followed by a £4.2 billion deal for Southern Water last month to a consortium led by Australia’s Challenger Infrastructure Fund and JP Morgan Asset Management.

Kelda said that an offer was not certain however it has retained Greenhill and Merrill Lynch as joint advisors while JPMorgan Cazenove will act as corporate banker and provide financial advice to the firm.

November 23, 2007