UK utility to open books to Li's group
Source: Agencies |
July 12, 2011, Tuesday
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Print Edition
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NORTHUMBRIAN Water is to open its books to a group owned by Li Ka-shing, Asia's richest man, who has made a takeover approach that could value the British water utility at 2.4 billion pounds (US$3.9 billion).
Northumbrian said yesterday that Cheung Kong Infrastructure Holdings (CKI) had made a proposal of 465 pence per share, a 21 percent premium to Northumbrian's share price before reports of a takeover surfaced last month.
Shareholders will also receive a net final dividend of 9.57 pence. Analysts had expected CKI to pay 450-500 pence.
"The current bid level including the final dividend is 475 pence per share, and we regard this as fair, and likely to be recommended by the board," Investec analyst Angelos Anastasiou said, adding the company's largest shareholder, the Ontario Teachers' Pension Plan, would likely be happy with the offer.
"The in-price for Ontario Teachers' Pension Plan for most of its 27 percent stake is just 198 pence per share," he said.
A CKI spokeswoman said yesterday's announcement that Northumbrian was to open its book was the "first step," adding due diligence would be started right away.
"There is a chance they do due diligence, and say 'We are not going to bid at this level' and walk away," Anastasiou said, pointing to the share price, adding: "There is not a firm bid yet and something could crop up regulatory-wise that might cause it to be blocked (but) I think that is unlikely".
Britain, open to foreign ownership of infrastructure assets, has proved a popular investment destination for the octogenarian Li, who has bought into regulated utility assets in the past.
Northumbrian said yesterday that Cheung Kong Infrastructure Holdings (CKI) had made a proposal of 465 pence per share, a 21 percent premium to Northumbrian's share price before reports of a takeover surfaced last month.
Shareholders will also receive a net final dividend of 9.57 pence. Analysts had expected CKI to pay 450-500 pence.
"The current bid level including the final dividend is 475 pence per share, and we regard this as fair, and likely to be recommended by the board," Investec analyst Angelos Anastasiou said, adding the company's largest shareholder, the Ontario Teachers' Pension Plan, would likely be happy with the offer.
"The in-price for Ontario Teachers' Pension Plan for most of its 27 percent stake is just 198 pence per share," he said.
A CKI spokeswoman said yesterday's announcement that Northumbrian was to open its book was the "first step," adding due diligence would be started right away.
"There is a chance they do due diligence, and say 'We are not going to bid at this level' and walk away," Anastasiou said, pointing to the share price, adding: "There is not a firm bid yet and something could crop up regulatory-wise that might cause it to be blocked (but) I think that is unlikely".
Britain, open to foreign ownership of infrastructure assets, has proved a popular investment destination for the octogenarian Li, who has bought into regulated utility assets in the past.
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