Bank linked to AWG interest
Anglian Water owner AWG found itself back in the spotlight today as speculation mounted that it could be on the brink of a bid battle.
AWG recommended an offer worth £2.2bn (€3.2bn) billion last week, but it was reported today that Merrill Lynch had positioned itself to participate in a possible counter-offer for the east of England water services provider.
The Financial Times said the investment bank appeared more likely to co-invest in any transaction, rather than purely play an advisory role.
AWG said last week that it had received other approaches, just 90 minutes after announcing a deal with a consortium led by the asset management arm of Commonwealth Bank of Australia and also involving 3i of the UK.
Losing bidders in the ongoing auction of Thames Water could be attracted to AWG, which owns the infrastructure services business Morrison.
Final offers for Thames Water are expected by the end of this week, with reports suggesting that a consortium led by Qatar’s state investment fund could be prepared to table an offer worth between £7bn (€10.3bn) and £10bn (€14.8bn).
German owner RWE is looking to sell Thames, which has 13 million customers in London and the south east of England, and has sparked anger in recent months over leakage rates.
Interest in UK water assets has also seen South East Water taken over for £665.4m (€987m) by the same Australian-based group that bought nearby Mid Kent Water last year.
Infrastructure funds have been attracted to the sector by the stable cash flows offered by regulated water companies.
