UPDATE: Kelda goes to Citigroup consortium

Source: Exec Digital UK

Date :27/11/2007 09:16:57

Kelda Group, the owner of Yorkshire Water, said yesterday it will be bought by a infrastructure consortium including Citigroup, HSBC and Prudential in a deal worth £3 billion.

Kelda, a supplier of water and sewage services to 4.7 million people and 140,000 businesses in Northern cities such as Leeds and Sheffield, said shareholders would receive 1,090 pence a share from the Saltaire Water consortium.

Shareholders will also receive a 10.65 pence a share dividend, taking the total to 1,100.65 pence and valuing the company at £3.03 billion.

Under the proposal, Citi's fund will own 41 percent, the Singapore government 34 percent, insurer Prudential's fund 15 percent and HSBC Bank the remaining ten percent.

Continued delivery

Kevin Whiteman, Chief Executive of Kelda said that the offer was good for customers, employees and shareholders, representing excellent ‘value’, ‘with a view to continued delivery of excellent service levels to customers, and opportunities for our employees”.

He declined to say whether any other approaches had been made.

Growth, acquisition

Saltaire is expected to use Kelda, which employs 4,000 staff, as a platform for further acquisitions in the UK and European utilities sector.

Juan Bejar Ochoa, a representative of the consortium, said the acquisition offered “the potential to deliver further growth and investment opportunities”.

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.

November 27, 2007