UK-based utilities giant Severn Trent has rejected a takeover bid approach from a consortium of foreign investors including the Kuwait Investment Office.
The company said the bid, reported to be in the region of £5bn ($7.6bn), completely undervalues the firm.
The UK water company said in a statement that it had met the consortium - comprising of Canadian infrastructure investor Borealis, the Kuwait Investment Office and Universities Superannuation Scheme Limited - on Tuesday for the first time to discuss a possible offer.
However the proposal tabled by the potential bidders came at only a "modest premium" to the share price before the initial approach was revealed to the market, Severn Trent said.
"The board of Severn Trent has reviewed the proposal with its advisers and concluded that it completely fails to recognise the existing and potential value of Severn Trent," the statement said.
"Accordingly the board has informed the consortium that it has rejected the proposal," it added.
Yield-hungry investors have been showing strong interest in British water and sewerage firms as they seek stable cash flows and a favourable regulatory structure.
Big investors like pension funds and insurers have also been increasingly investing in companies directly or teaming up with partners.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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