'Superman' Li's Northumbrian Water tonic

The Hong Kong-based billionaire and business "superman" Li Ka-Shing has made an indicative cash offer for Northumbrian Water, the company said yesterday.

If the deal goes ahead, it will add the FTSE 250-listed water supplier to a growing list of British assets bought by the octogenerian entrepreneur's sprawling property-to-infrastructure-to-retail conglomerate in recent years.

Yesterday's statement from Northumbrian Water confirmed the speculation that has swirled around the company all week, pushing its shares up more than 13 per cent. The stock rose by another 1.5 per cent to close at 422p last night.

The first hint of an approach sent the stock soaring on Monday, when Mr Li's Cheung Kong Infrastructure (CKI) made a statement confirming that it was "in the preliminary stages" of assessing a "potential cash offer". But Northumbrian claimed to have no knowledge of the matter, stating unequivocally it had "not received any proposal which could result in an offer or possible offer for the company".

As the days passed with no further clarification, one local MP, Kevan Jones, berated CKI for leaving Northumbrian Water's 3,000 staff "in the dark" about their futures, even as others expressed concern that a foreign owner would not understand the North-east's desperate need for local, private-sector jobs.

But Northumbrian announced yesterday that is had received a non-binding indicative proposal from CKI regarding a possible cash offer, although with the usual disclaimer that there was no certainty that an offer would be made. So far, there is no detail available about the bid for the group, which has a market capitalisation of £2.2bn and debts of £2.3bn.

Northumbrian Water's major shareholder is the Ontario Teachers Pension Plan, whose 26.7 per cent holding is key to any deal. Options being discussed by City analysts include CKI taking over the remaining 73.3 per cent not held by Ontario. Although CKI is the first formal bidder for Northumbrian, its shares have risen more than 40 per cent since February thanks to the takeover talk. The company's most recent accounts, at the start of this month, detailed annual revenues up by 4.7 per cent to £738m as profits soared by 6.3 per cent.

Mr Li – the world's 11th-richest man on the Forbes Rich List – already has a significant presence in Britain through both CKI and its vast sister group, Hutchison Whampoa, which is active in retail, infrastructure, telecommunications and ports. CKI already owns Cambridge Water and holds 4.75 per cent of Southern Water.

Northumbrian Water provides water and sewage services to 2.6 million people in the North-east of England, and a further 1.8 million in East Anglia through Essex & Suffolk Water.

Tycoon's British assets

*Li Ka-Shing's interest in Northumbrian Water comes just a year after his Cheung Kong Infrastructure group paid £5.8bn for French electricity giant EDF's 100,000 miles of British power networks.

CKI also owns 50 per cent of the Seabank Power station near Bristol, 47 per cent of Northern Gas Networks (with a further 41 per cent owned by Power Assets, which CKI also part-owns), all of Cambridge Water and a 4.75 per cent stake in Southern Water.

Mr Li's Hutchison Whampoa group owns the 3 mobile phone network; London property including Chelsea's Lots Road power station, Belgravia Place and the Albion Riverside; the retail chains Savers, Superdrug and The Perfume Shop and major ports at Felixstowe, Harwich and Thamesport.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral