UPDATE 2-Severn Trent shares leap on takeover approach

Tue May 14, 2013 5:40am EDT
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* Talks at very early stage

* Consortium being advised by Deutsche Bank

* Severn Trent shares up 18.9 percent (Adds consortium statement, deadline, advisers)

By Anjuli Davies

LONDON, May 14 (Reuters) - Shares in Severn Trent surged to all-time highs after the British water company confirmed it had received a takeover approach from a consortium including Borealis Infrastructure and the Kuwait Investment Office.

The group, which said on Tuesday the consortium also included Britain's Universities Superannuation Scheme, said the approach was at an early stage and no proposal had been made.

Shares in Severn Trent, which is being advised by Rothschild and Citi, were the top gainers on Britain's benchmark FTSE 100 index, rising as much as 18.9 percent to an all-time high of 2,170 pence at one stage.

Britain's other two remaining listed water companies Pennon Group and United Utilities also rose by 4.3 percent and 4.1 percent.

"United Utilities and Pennon will attract further speculative interest," said Securequity sales trader Jawaid Afsar. "These are cash cows, generating huge amounts of profits and generating very good dividends, and these make attractive targets for overseas investors."   Continued...