A consortium led by Hong Kong tycoon Li Ka-shing's Cheung Kong Infrastructure Holdings has agreed to take over Northumbrian Water Group in an all-cash deal which values the British utility at about £2.41bn.
In the biggest takeover this year of a British listed company, CKI said the consortium is offering to acquire Northumbrian at 465 pence per share. Northumbrian shares closed at 449.3 pence apiece.
"The directors of Northumbrian Water have confirmed that they intend to recommend unanimously that Northumbrian Water shareholders vote in favour of the scheme," the statement said.
Ontario Teachers' Pension Plan Board, which has a 26.8 per cent stake in Northumbrian Water, plans to back the acquisition proposal, it added.
In reaction to the news, shares of CKI rose more than two per cent to a record intraday high.
The consortium, called UK Water, is indirectly wholly-owned by CKI, Cheung Kong Holdings and Li Ka Shing Foundation Ltd, a charitable foundation established by Li. CKI is controlled Li's ports-to-telecoms conglomerate Hutchison Whampoa Ltd , which in turn is controlled by Cheung Kong Holdings.
CKI and CKH each hold a 40 per cent stake in UK Water, with LKSFL holding the remaining 20 per cent.
CKI said it would contribute £879.5m to the acquisition, to be funded with internal resources and a bridge loan of £600m.
Northumbrian Water is one of the 10 regulated water and sewerage businesses in England and Wales.
City A.M. Reporter