Thames abandons campaign for water mergers
Thames Water has dropped its campaign to be allowed to merge with another water company after clear signals from ministers that the Government wants to see further competition, not consolidation, in the industry.
The company, Britain's biggest water supplier, has instead decided to concentrate on building up its international and non-regulated activities. Thames already generates more of its profits from "non-core" activities than any other UK water company and is expanding aggressively overseas.
Thames bought the American water company E-Town last year and is keen to make further bolt-on acquisitions in the US. It is also pursuing "build and operate" water schemes, including one in the China and another in Thailand.
Bill Alexander, Thames' chief executive, led the campaign for UK water companies to be allowed to merge, personally lobbying the Prime Minister's office. He argued that without mergers, the UK water industry would be less well-equipped to compete in international markets with big overseas water companies such as Vivendi and Enron.
Now, however, Mr Alexander is thought to take the view that a merger with another UK water company would merely double Thames' regulatory risk and prevent it from achieving a stock market rerating.
Another factor is uncertainty over the next water regulator's policy towards mergers. The Government had hoped to announce a successor to Ian Byatt, the head of Ofwat, by Easter but the timing has slipped. Mr Byatt leaves in July.
Robert Miller-Bakewell, the respected utilities analyst at Merrill Lynch, rates Thames as one of his two buy recommendations in the sector alongside Kelda, saying it should be able to deliver dividend growth of 5 per cent or more.
- 1 Double chins could be 'cured' without surgery or dieting using new injection
- 2 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Christian blogger says she will not wear leggings in public because they entice men and cause them to look at her 'lustfully'
- 5 Thank heavens for Louise Mensch and her foul-mouthed tweets to world leaders
Scientists discover way to unboil an egg – and the results are not as pointless as that sounds
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
iJobs Money & Business
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...