Pennon Group approached for takeover bid for South West Water

3rd Apr 2013 09:47

Abu Dhabi Investment Authority is reportedly considering a bid for Pennon Group's South West Water. The sovereign wealth fund is said to be preparing a cash bid of up to 775p a share for the group, according to the Daily Mail on Wednesday. Pennon's underperforming waste water management business Viridor would also eventually be sold, according to the reports. Viridor issued a shock profit warning in November, saying full-year profits would be below market expectations and some 30% lower than the previous year due to falling prices for recycled materials known as recyclate. In contrast, South West Water has performed strongly with earnings up 6.6% year-on-year. A spokesperson for Pennon declined to comment on reports of a possible takeover when contacted by Sharecast.Shares rose 2.72% to 642p at 10:19 at Wednesday.RD