AWG floats free after Bream forced to abandon £1bn takeover

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The Independent Online

The uncertainty over the ownership of AWG, the parent company of Anglian Water, was lifted yesterday after the specially-constructed bid vehicle, Bream Investments, abandoned its £1bn attempt to take over the business.

Bream and its financial backers, Star Capital Partners and Caxton-Iseman Capital, were forced to withdraw after failing to meet a Takeover Panel deadline for making a firm offer for AWG. Bream was led by Francis Gugen, a former AWG executive, and Gordon Morrison, a property investor who sold his family construction company to AWG three years ago.

The collapse of the takeover attempt leaves AWG with a £3m bill for advisory work and Bream's founders with egg on their faces, having stalked AWG for four and a half months to no avail.

Bream's hopes of acquiring AWG were dealt a severe blow earlier this month when its original financial backer, WestLB, pulled out after the German bank decided not to support the offer being assembled by the head of its principal finance arm, Robin Saunders. The Panel then gave Bream a two week deadline to "put up or shut up". In a statement issued yesterday shortly after the noon deadline had expired, Bream and its backers said that given the short amount of time available it had not been possible to "formulate a definitive proposal with regard to an offer for AWG on terms acceptable to the company".

Bream and its backers are now prevented from making a fresh offer for AWG for six months unless invited to do so by the company or a rival bidder surfaces.

A source in the Bream camp said it was unlikely to be back in talks anytime soon, adding: "Everyone is planning to have a long rest and a bit of holiday."

WestLB and Bream first approached AWG in January with an offer worth 510p. That was subsequently increased to between 520p and 545p but AWG's management always made it plain that any bid would have to be worth more than 600p to be taken seriously. AWG shares closed up 3p at 522p last night.