Severn Trent Water steps up its Dee Valley takeover bid to £84m

Severn Trent Water takes over Dee Valley Water
Severn Trent Water takes over Dee Valley Water

Earlier this month, Severn Trent had agreed to acquire Dee Valley Water for about £78.5m, beating investment firm Ancala Fornia’s bid of £71.3m. Yesterday, against all odds Severn Trent increased their bid up to £84m, offering voting shareholders 1,825 pence per share (an increase of 119 pence from 1,706 pence that was offered to voting shareholders on 16th November).

 

The revised deal followed a series of events related to strong opposition from Wrexham representatives who feared the Severn Trent takeover would negatively affect the quality of service served to the region and the situation of today’s Dee Valley employees. Many feared multiple water job losses, potential relocation for Dee Valley’s staff, as well as higher bills for its clientele.

Moreover, Severn Trent Water operates a central procurement system which is causing concerns amongst Dee Valley’s local suppliers who are in great danger of losing business for potentially not meeting their procurement standards.

In parallel, Severn Trent reported a £28.2m revenue increase on the same six month period last year, going up to £906.8m in revenue which may explain their significant bid increase of £5.5m.

 

At 150 years old, Dee Valley Water is a medium sized private supplier of water with a workforce of 200 people which delivers potable water to about 260,000 people in north east Wales and Cheshire with bases in Wrexham and Chester.

Severn Trent Water Chief Executive, Liv Garfield is confident that the implementation of the company’s successful operating model to the neighbouring geographic area will benefit customers who will be likely to share in half of any wholesale cost efficiencies achieved, which will be reflected in future bills.

 

Severn Trent Water currently supplies 1.8 billion litres of clean water daily and treats sewage to a population of approximately 7.7 million across the Midlands and mid-Wales. To ensure continuous clean water supply, the UK water supplier maintains 46,000 km of water pipelines.

Both Severn Trent Water and Severn Trent Services entities constitute Severn Trent Plc, a FTSE 100 UK Water company that employs more than 15,000 people across the UK, US and mainland Europe, with some involvement in the Middle East.

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