Friday, July 24, 1998 Published at 08:03 GMT 09:03 UK
Business: The Company File
Wessex Water falls to US bid
The bid for Wessex Water is the latest in a stream of utility takeovers
Wessex Water, the privatised water company which supplies more than one million people in south west England, has agreed to a £1.36bn takeover offer from US energy giant Enron.
The bid, which is equivalent to 630p a share, represents a near 28% premium to the group's closing price of 493p on Thursday.
Wessex Water's directors have recommended the offer to shareholders.
Enron said there would be no redundancies among Wessex Water's staff of around 1,400 and added it would keep the company's headquarters.
Analysts believe the bid is high enough to succeed.
The current Wessex management team will retain their existing roles after the takeover.
Enron, which describes itself as one of the world's leading integrated electricity and gas companies is based in Houston, Texas, and has a large international business.
It wants to use Wessex Water to build a new division to take advantage of any future water privatization programmes in Europe, Latin America and Asia.
Wessex Water is the latest UK utility group to fall prey to a bid from a US company.
Wave of consolidation
The deal could spark another wave of consolidation in the utility industry, with renewed takeover speculation centring on other water groups.
Shares in the water stocks jumped higher in early trading on the stockmarket.
Wessex Water chairman Nicholas Hood said: "For some time Wessex has been seeking ways to expand the opportunities for our company and our people. This offer will make Wessex the heart of a global water infrastructure business, one which we believe will become a world leader."
Wessex will become the fifth of the 10 water companies floated on the stock market in 1989 to be taken over and the second to fall into foreign hands.
As well as supplying water, Wessex provides sewage facilities for 2.5m people.
In the year to March 31, it made a profit before tax of £139m on turnover of £266m.
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