Hong Kong company buys Essex & Suffolk Water owner
THE parent group behind Essex & Suffolk Water today agreed a �2.4bn takeover by the investment firm of Hong Kong entrepreneur Li Ka-shing.
Northumbrian Water’s Essex & Suffolk Water division supplies water to about 770,000 domestic and business customers in mid Essex, north Suffolk and south Norfolk.
In a stock market statement, Northumbrian Water said its shareholders will receive 465p per share from a consortium of companies headed by Cheung Kong Infrastructure (CKI), the firm controlled by billionaire Mr Ka-shing.
This morning, CKI said it attached “great importance to the skills and experience of the existing management and employees” and the “critical importance of Northumbrian’s business to the communities it serves”.
CKI already owns a broad range of utility operations across the UK, including electricity distributor UK Power Networks, gas distributor Northern Gas Networks and stakes in Southern Water and generator Seabank Power.
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In recent months, the group completed a joint �5.8bn deal to buy 170,000 miles of electrical network covering London, the South East and eastern England from France’s EDF.
But Mr Ka-Shing’s group has agreed to sell Cambridge Water to HSBC bank as part of the deal with Northumbrian to avoid competition issues.
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Ontario Teachers’ Pension Plan - owner of more than a quarter of Northumbrian - has agreed to accept the takeover offer.
HL Kam, CKI’s group managing director, said: “Northumbrian has an excellent reputation in the UK water sector.
“We attach great importance to the skills and experience of the existing management and employees of Northumbrian and believe they will be an important factor in the continuing success of the Northumbrian Group.
“Through our experience with CKI’s other businesses in the UK –including UK Power Networks in London, Eastern England and South East England; Seabank Power in Bristol; and Northern Gas Networks in Northern England – we appreciate the critical importance of Northumbrian’s business to the communities it serves.
“We welcome the opportunity to support Northumbrian’s strategy of upholding operational excellence and service standards to its communities in North East and South East England.”
Sir Derek Wanless, chairman of Northumbrian, added: “We have reached agreement with the consortium on its offer for the company.
“The offer represents an attractive premium to both the regulated capital value of Northumbrian Water Limited and the company’s share price before recent speculation began.
“The directors believe that, whilst Northumbrian would have a strong future as an independent company, the consortium’s offer to Northumbrian shareholders fairly values the current and future prospects of the company.
“The directors also welcome the statements that the consortium has made with respect to Northumbrian’s management and employees, its location of business and its support for the communities it serves.”
In the last financial year, Northumbrian saw profits rise by 6.3pc to �181m.