Ancala trumped as Severn Trent bids £78.5m for water firm

UK-listed utility Severn Trent has agreed to buy water company Dee Valley in a deal worth £78.5 million ($97.7 million; €91.4 million).

Severn Trent’s move comes despite infrastructure investment manager Ancala agreeing a £71.3 million deal with Dee Valley only three weeks ago. Ancala’s proposed takeover valued Dee Valley 1,550 pence per ordinary share but it was pipped by Severn Trent with a 1,705 pence per share valuation.

Dee Valley said the terms of the deal with Severn Trent “are in the best interests” of all shareholders and added that after “careful consideration, the Dee Valley Board considers the acquisition represents a superior offer” to the one offered by Ancala.

Ancala had not provided comment by press time.

Severn Trent said its acquisition would be financed by cash and that it “intends to fully support continued investment in infrastructure in the Dee Valley region”. Investment in Dee Valley will form part of its £3 billion investment programme from 2015 to 2020.

In 2013, Severn Trent rejected a series of takeover attempts by Borealis, the sovereign wealth fund of Kuwait and the Universities Superannuation Scheme. A year later it cut 500 jobs in what it described as “efficiencies in its management structure”.