The board of Severn Trent has announced that it has rejected a possible offer by consortium LongRiver, comprised of Borealis Infrastructure Management and the Kuwait Investment Office and Universities Superannuation Scheme (release).
Offering a price of 2,154.49p per share, the board said that this represents a premium of just 3.5 per cent on LongRiver's previous proposal and just 20.5 per cent on Severn Trent's share price on the day before the announcement of interest.
The Board, having consulted its financial advisers, has unanimously concluded that the Proposal continues to fail to reflect the significant long term value of Severn Trent or to recognise its future potential.
Andrew Duff, the chairman of Severn Trent, said:
Throughout this process the Board has been careful to act in the best interest of shareholders. We have held private conversations with LongRiver and made clear that we have no objections to fuller discussions in the event that LongRiver puts forward a proposal which properly reflects the long term value and future potential of Severn Trent.
The Severn Trent Board has carefully considered this Proposal. The Board unanimously believes that this Proposal is not at a level that adequately compensates our existing shareholders for selling Severn Trent's increasingly rare combination of yield, inflation - linked business model and record of operational delivery for customers.