Tuesday, October 9, 2007

JPMorgan consortium to buy U.K.'s Southern Water

From MarketWatch:
A group of investment funds led by JPMorgan Asset Management Infrastructure Investments Group and including the Sydney-based Challenger Infrastructure Fund, has agreed to purchase U.K.-based Southern Water from Royal Bank of Scotland in a multi-billion dollar deal....

From the Financial Times:

...The sale comes nearly a year to the day after a consortium led by an infrastructure fund run by Macquarie, the Australian investment bank, won the hotly contested auction for Thames Water, the UK’s biggest water company, with a ₤8bn bid.

UK water assets have attracted high valuations from infrastructure bidders, including pension funds, because they offer stable long-term returns that can match the funds’ liabilities.

...Southern Water’s sale may rekindle speculation that listed UK water stocks such as Pennon and Kelda, the owners of South West Water and Yorkshire Water respectively, could become takeover targets.

The UK water sector has attracted large amounts of investment from infrastructure and pension funds over the past few years. This is due to the industry’s low-risk nature, its stable cash flow and its generous dividend policies....MORE