CKI indicates 465p per share for Northumbrian

11th Jul 2011 07:22

Hong Kong infrastructure group Cheung Kong has made a non-binding indicative proposal to bid for UK water and waste management group Northumbrian Water, offering 465p cash per share plus the right to retain the recently declared net final dividend of 9.57p.News of the Cheung Kong takeover approach were released on 1 July, but rumours of the bid had leaked out before that, prompting a rise in the share price of Northumbrian from just under 370p to just under 420p. Confirmation of the bid approach at the beginning of the month gave another small fillip to the share price, but even so, the shares were trading almost 40p below Cheung Kong's indicative bid price on the last trading day before the bid was announced.Cheung Kong invests in energy, transport and water infrastructure in Hong Kong and mainland China and internationally. It has stakes in the UK companies Southern Water and Cambridge Water.Cheung Kong has indicated to the board of Northumbrian Water that it will have completed the sale of Cambridge Water prior to any announcement of a firm intention to make an offer for Northumbrian Water.The board of Northumbrian Water has agreed to grant Cheung Kong a limited period to undertake confirmatory due diligence. Cheung Kong has reserved the right not to make a bid at all, or to do so at a price lower than the indicated level of 465p per share. --jh