AWG defends itself over options handout

AWG, the owner of Anglian Water, has dismissed criticisms that it awarded share options to directors and other staff on the day it received a bid approach from German bank WestLB.

AWG admits it made an award of 3.4 million options to staff on 31 January as part of its Save As You Earn Scheme. But although this coincided with a 510p indicative offer from WestLB's bid vehicle Bream Investments, AWG says the offer was sent to staff at the beginning of January.

"It's a company-wide SAYE scheme and has been happening every year for about 10 years," a spokesman said. "It all pre-dated any approaches."

AWG has rejected the £900m bid from West LB saying it undervalues the business. The share price has already risen above the indicative 510p offer price with some analysts saying it is worth north of 600p per share. The shares closed at 520p yesterday, down 9p.

WestLB's bid camp includes Gordon Morrison, the brother of Sir Fraser Morrison, the former chairman of Morrison Construction which AWG acquired for £263m in September 2000. The deal is now the subject of a legal battle with AWG claiming Sir Fraser misled it over the company's finances. Sir Fraser denies the claim.