Anglian Water falls to Osprey for £2.25bn

A consortium led by 3i and Canadian and Australian pension funds looked set to seal their attempted £2.25bn takeover of Anglian Water yesterday, after the utility's parent company AWG said other prospective bidders had walked away.

AWG shares fell 28p to 1,573p, back below the 1,578p offer price from the Osprey Acquisitions consortium, after AWG told the Stock Exchange that "as of this date, the board is not aware of any other parties that have expressed an interest in making a competing offer".

AWG, which owns Anglian Water and supplies water and sewerage services to about 5.5 million people in eastern England, said it was reiterating its recommendation of the Osprey offer.

The Osprey consortium, comprising of the Canada Pension Investment Board; Colonial First State Global Asset Management, a division of Commonwealth Bank of Australia; Industry Funds Management; and 3i Group, raised its original offer for AWG last month in an attempt to see off potential counterbidders. It also increased its stake in AWG to 22 per cent.

Investors including the Wall Street bank Merrill Lynch, Babcock and Brown and Australia's Macquarie Bank, were believed to be preparing counterbids.

Macquarie subsequently won the £8bn auction for Thames Water, the UK's largest water utility, fuelling expectations that the Thames losers - including Guy Hands' Terra Firma and the investment arm of Qatar - would set their sights on Anglian. However, analysts at the time pointed out that the valuation put on AWG by Osprey's bid was higher than what Macquarie paid for Thames.