Qatar in lead with £8bn bid for Thames

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The Independent Online

The Gulf state of Qatar is thought to be in pole position to buy Thames Water after tabling a bid worth about £8bn over the weekend.

The deadline for bids to Goldman Sachs, which is running the auction on behalf of RWE, closed on Saturday morning. The board of the German company is expected to meet in the next few days to consider the offers and select a preferred bidder.

A consortium involving the Qatar Investment Authority and the investment bank UBS is in competition with up to three other bidders for Britain's biggest water company, which was put up for sale this year by its German owners RWE.

Guy Hands' private-equity firm Terra Firma and the Australian bank Macquarie also submitted bids - worth about £7bn it is thought. Another bidder is understood to have been the Australian infrastructure investor Alinta.

The unsuccessful bidders are likely to turn their attention to one of several other UK water companies which are ripe for takeover. Severn Trent, which has just completed the demerger of its waste business, Biffa, and Pennon, the owner of South West Water, are both thought vulnerable. AWG, the owner of Anglian Water, is already the subject of an agreed £2.3bn bid from a group of Canadian and Australian pension funds partnered by 3i of the UK, but could attract interest from those consortia which lose out in the auction for Thames.

There had been speculation that Qatar was having difficulty financing its bid, but this was emphatically denied by advisers who said the offer it submitted over the weekend was fully funded. They also denied the oil-rich state would throw "crazy money" at Thames, although rival bidders believe it was in a position to pay the most.

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