Borealis group increases offer for U.K. water company Severn Trent

TORONTO – A consortium including Canadian investment firm Borealis Infrastructure Management Inc. is proposing to buy British water company Severn Trent PLC in a conditional offer it valued at C$8.4 billion.

Borealis is the infrastructure investment arm of OMERS, the Ontario Municipal Employees Retirement System.

The LongRiver consortium, comprising Borealis, the Kuwait Investment Office and Britain’s Universities Superannuation Scheme Ltd., said Friday its offer is now worth 22 pounds cash for each of Severn Trent’s shares.

That’s about C$34.87 at current exchange rates and about 5.8 per cent higher than an earlier tentative offer, which the Severn Trent board rejected on Monday, saying it didn’t adequately reflect the company’s long-term value.

The consortium issued a statement Friday saying their latest offer includes the final dividend of 45.51 pence per share that the company’s board had announced May 30.

LongRiver said it wouldn’t make a firm offer unless it gets the board’s recommendation and the consortium is satisfied with a due-diligence review of Severn Trent.

The Severn Trent Water serves 4.2 million households and businesses in the Midlands region of England and mid-Wales while Severn Trent Services has customers in United States, Europe, Middle East and Asia.