Severn Trent has increased its cash offer price for rival water company Dee Valley Water to 1,825 pence per share. The revised offer values Dee Valley at approximately £84M.
The water and sewerage company put in the bid after market closed on Wednesday 23 November. It said it “continues to believe that an acquisition of Dee Valley by Severn Trent Water would provide a very successful outcome for the customers of Dee Valley”.
Severn Trent's initial bid for Dee Valley Water, which valued the company at £78.5M, was topped by infrastructure investment manager Ancala, which made a rival offer 1 pence per share higher after close on Tuesday 22 November. The bidding war between the two companies followed Ancala's initial offer for Dee Valley which placed its value at £71.3M.
According to reports in the local media, local MPs have raised concerns that Severn Trent’s proposed takeover of Dee Valley could result in job losses.
In contrast, Ancala said in a statement that under its ownership Dee Valley would “continue to be a local company, run by staff situated locally within the community who will be incentivised to deliver excellent customer service to that community”.
Severn Trent said in its latest statement that it intends to “enhance the current customer service offering” including by extending support for vulnerable customers where we provide discounts and support for local people who most need it – potentially up to 90 per cent off water bills in some cases.
According to its financial statement, released today, Severn Trent offers the lowest combined average bills in Britain – £329 in 2016/17 – and has invested more than £250 million in its network.
-This article is a version of a story that first appeared on Utility Week.