June 11, 2013 / 10:14 AM / in 4 years

Bidder for Britain's Severn Trent set to walk as deadline looms

LONDON, June 11 (Reuters) - British water company Severn Trent will see its suitor walk away on Tuesday unless it starts last-minute talks with the Canadian-led consortium whose three previous approaches it has spurned.

A deadline of 1600 GMT has been set by Britain’s mergers and acquisitions regulator for the LongRiver consortium to make a formal offer for the utility or withdraw its interest.

Some major shareholders have urged the FTSE 100 company to open negotiations with the consortium in an attempt to elicit a higher offer than the 22 British pounds per share it rejected late on Friday.

Severn Trent gave the approach short shrift, saying that it did not reflect the long-term value or potential of the company.

Its stance has tested the patience of the bidder, comprising Borealis Infrastructure, part of Canadian pension fund OMERS, a Kuwaiti sovereign wealth fund and Britain’s Universities Superannuation Scheme. The consortium said that a new offer would not be forthcoming unless Severn Trent’s board becomes more receptive.

“In the absence of any such engagement, there will be no further proposal from the consortium and no offer for Severn Trent shareholders to consider,” Michael Rolland, President and CEO of Borealis, said on behalf of LongRiver on Monday.

The Severn Trent board, for its part, said that it had no objection to resuming talks if the consortium put forward a proposal that better reflected its prospects.

British utilities have been an attractive target for bidders looking for the secure and consistent cash flows that the regulated water and energy supply industries can deliver.

Shares in the group tumbled 6 percent on Monday and fell a further 0.3 percent on Tuesday morning to 19.40 pounds as hopes of a firm offer receded.

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