Home ListingJune 3, 2013

Utility Rejects Second OMERS, USS, KIO Advance

<em>Infrastructure is appealing, but investors have to be prepared to pay.</em>

Reported by Featured Author

(June 3, 2013) — A UK utility company has rejected a revised proposal from a consortium of large global investors, saying it undervalued its worth.

Severn Trent, which is listed on the London Stock Exchange, this morning announced to the market that it had rejected the advances of Borealis Infrastructure Management, which is backed by the Ontario Municipal Employees Retirement System, the Kuwait Investment Office, and the UK’s Universities Superannuation Scheme.

The firm said the consortium’s proposal, which represented a 16% premium to its share price on the day before it originally bid for the company, “fails to reflect the significant long term value of Severn Trent or to recognise its future potential”.

The consortium, operating under the name LongRiver Partners, had originally bid for the water and waste water company on May 14.

Infrastructure investing has become an investment of choice for large institutional investors. Buying companies with long-term, inflation-linked return potential seems an attractive option to many. In the UK, just three of the 10 water and waste water companies are publically listed with the others having been taken into private hands.