Wessex Water in £1.2bn buyout bid

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The Independent Online

The management of Wessex Water is putting together a £1.2bn bid to buy the West Country business from its collapsed US parent Enron.

Chaired by Colin Skellett, Wessex is understood to have interviewed prospective financial advisers shortly before Christmas, and is to make an appointment soon. Wessex's management team is expected to go head-to-head with German bank WestLB and Royal Bank of Scotland.

One source close to Wessex revealed that the management may make a formal approach to a bank such as WestLB, whose bid would rely on retaining management. Wessex Water is controlled by Azurix, a third owned by Enron and two-thirds owned by Atlantic Water Trust (of which Enron owns half).

In December, Azurix appointed the investment bank Schroder Salomon Smith Barney to handle the sale of Wessex, and first-round bids are due within a fortnight.

A spokeswoman for water regulator Ofwat said: "A bid from another water company would be automatically referred to the Competition Commission." This could rule out Thames Water, which has already expressed an interest in Wessex.

It could also complicate WestLB's and Royal Bank of Scotland's bids because both have stakes in regional water companies.

Enron was declared bankrupt in early December. Its collapse had little effect on Wessex, whose finances were ring-fenced.