CKI completes Northumbrian Water deal

Northumbrian Water (NW) has been officially delisted from the London Stock Exchange after the completion of its £2.41bn takeover by UK Water.

NW’s cancellation of listing, which took effect last week (October 14), completes its acquisition by UK Water, which is owned by a consortium led by Hong Kong’s wealthiest man Li Ka-shing and owner of Cheung Kong Infrastructure (CKI) Holding Limited, Cheung Kong Limited and Li Ka Shing Foundation Limited.

The deal was agreed in August after the board of utility recommended the offer and concludes a chain of acquisitions in the sector, which saw CKI sell Cambridge Water to HSBC in August, which then promptly sold it to South Staffordshire earlier this month in order to comply with UK competition rules. (HYPERLINK)

As a result of the sale, NW, which first listed on the stock exchange in 2003, has been valued at approximately £4.8bn making it the largest takeover this year. Shareholders of Northumbrian Water will receive 465p share from CKI.

Commenting on the takeover, CKI group managing director H L Kam, said that it plans to book two and a half months of profit contribution in the 2011 financial year.

He added: “We are very pleased about the acquisition of Northumbrian Water. This regulated business is poised to bring in strong and recurrent cash flow to CKI. Northumbrian Water is a premium investment which provides CKI with immediate earnings.”

For the year ended March 31 2011, NW reported £178.3m in profits. The enterprise value of the NW acquisition is around £4.8bn.

As well as the NW deal, the acquisition marks CKI’s third UK investment in the past 18 months – following its takeover of Seabank Power and UK Power Networks last year, bringing the value of its UK investments to around £5.1bn.

CKI anticipates the latest deal will strengthen its global portfolio of investments in the gas, water and electricity sector.

Mr Kam said: “These two significant projects – Northumbrian Water and UK Power Networks, are expected to bring us to a new level in earnings,

“The successful acquisitions of Northumbrian Water and UK Power Networks reflect clearly the strength of our financial capacity and the capability of our team in sourcing and acquiring attractive infrastructure projects.”

Carys Matthews

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