Severn Trent confirms takeover approach from foreign consortium

Severn Trent has confirmed press speculation that it has received a bid approach from a consortium of investors which is rumoured to value the UK utility company around 5.3bn pounds.

In a statement released on Tuesday morning, Severn Trent said it had received an approach with a view to making a proposal from Canadian infrastructure investor Borealis, the Kuwait Investment Office and Universities Superannuation Scheme Limited.

"This approach is at a very early stage, no proposal has been made and there can be no certainty that an offer will be made or as to the terms of any such offer, should one be forthcoming," the company said.

According to the Financial News magazine, sources said that a potential offer could come between 2,250p and 2,300p a share.

The news comes just a month after the firm revealed that Chief Executive Officer Tony Wray is to step down next year after seven years on the job.