USS, Borealis in £5bn bid for UK utility company
GLOBAL – The Universities Superannuation Scheme (USS) and the infrastructure arm of Canada's CAD61bn (€45bn) Ontario Municipal Employees Retirement System (OMERS) are in talks to buy UK utility Severn Trent for £5bn (€5.9bn), the company has confirmed.
Issuing a statement, the company acknowledged recent speculation that an offer had been made to acquire all of the company's current shares.
It also confirmed the involvement of the £32bn USS, Canada's CAD10bn Borealis Infrastructure and the Kuwait Investment Office, the London-based outlet for the country's sovereign wealth fund KIA in the bidding consortium.
The statement added: "This approach is at a very early stage. No proposal has been made, and there can be no certainty an offer will be made or as to the terms of any such offer, should one be forthcoming."
The company said that, in accordance with the UK's Takeover Panel code of conduct, the consortium would have until 11 June to confirm or deny its intention to bid for the utility.
A spokesman for USS said the fund had no comment on the matter.
Severn Trent's stocks opened up 300p at £21.25, but fell to £20.90 by midday.
The approach does not mark the UK fund's first venture into UK utilities.
In February, it confirmed it would provide £100m in long-term financing to Affinity Water.
The deal followed a similar £100m, 25-year financing deal with South East Water in October last year.
Borealis, meanwhile, owns a number of UK assets, including the high-speed rail link connecting London to the Channel Tunnel.
The £2.1bn deal in 2010 saw the manager outbid USS.