Richard Stanley, chairman of York Waterworks, will make just over pounds 1m from his 3 per cent stake in the business. John Raylor, another director of the company and a senior partner in a firm of local solicitors, will net pounds 1.3m.
But there is also good news for York Waterworks' 175,000 customers, who will enjoy a 15 per cent reduction in their bills. The water regulator, Ian Byatt of Ofwat, made the takeover conditional on a sizeable cut in water charges.
The reduction, which must take effect by April 2004, is additional to the 17.5 per cent cut in bills that York Waterworks will have to implement in 2000-2001 under its new price control formula.
The pressure group Waterwatch called for the takeover to be referred to the Monopolies and Mergers Commission but Yorkshire Water said because of its size York Waterworks fell below the threshold for an automatic referral.
Yorkshire Water, which has 4.5 million customers and a stock market capitalisation of pounds 2bn, is paying 457p in cash for York Waterworks ordinary shares - a 49 per cent premium to their price the day before takeover talks were disclosed.
The takeover could be the first in a series of mergers in the water industry ahead of the regulator's price review.Reuse content