Water firm opens its books after £2.4bn bid

Northumbrian Water has opened its books to an Asian fund seeking to buy it for £2.4 billion.

Cheung Kong Infrastructure (CKI), a fund owned by Hong Kong tycoon Li Ka-shing, said it intended to offer 465p a share for the company.

CKI said it expects to complete its sale of Cambridge Water before it makes a firm offer for the business, a move analysts have said could be necessary for the deal to gain regulatory approval.

Under the terms of CKI's non-binding proposal, Northumbrian shareholders would be entitled to receive the final dividend of 9.57p per share for the year ended 31 March.

The Hong Kong firm has infrastructure assets worldwide and recently completed a joint 5.8bn deal to buy 170,000 miles of electrical network covering London, the south-east and eastern England from France's EDF.

It also owns stakes in the Northern Gas distribution network and Seabank Power, an electricity-generating company located near Bristol.

Northumbrian, recently reported that profits rose by 6.3 per cent to 181 million in the year to 31 March. Revenues increased by 4.7 per cent reflecting a price hike at the start of a new five-year regime agreed with regulator Ofwat.

The company, which serves 2.6 million people in the north-east of England and a further 1.8 million through Essex & Suffolk Water, is 27 per cent owned by Canadian pension fund Ontario Teachers.