Pictet Asset Management SA, a shareholder in Severn Trent Plc, said it would accept a takeover offer of 2,300 pence a share for the U.K. water company as the 5 p.m. deadline for the bid approaches.
An offer of “2,300 probably, since we have a fiduciary duty to our investors, is a price we will not be able to reject,” Hans Peter Portner, senior investment manager at Pictet, said today by phone from Geneva. “My expectation is that there will be an extension of the negotiation period.”
Severn Trent, the U.K.’s second-largest publicly traded water company, on June 7 rejected a bid of 2,200 pence a share, its third approach since May 14. The bidding group comprises the Canadian infrastructure investor Borealis Infrastructure Management Inc., the Kuwait Investment Office and Britain’s Universities Superannuation Scheme.
The group has until 5 p.m. today to make a formal offer or walk away under U.K. takeover rules. The shares traded down 0.8 percent to 1,930 pence at 3:45 p.m. London time today, reducing their gains this year to 23 percent.
Severn Trent can also request an extension of the deadline. The group said yesterday that the Severn Trent board has shown no interest in discussing the existing offer and said it won’t make a new offer without such “engagement.”
“The consortium must be willing to reconsider the bid, and then if that happens, the board will engage in discussions which may mean an extension of this negotiation period,” Portner said.