[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Sunday, 3 June 2007, 14:33 GMT 15:33 UK
RBS is 'to sell' Southern Water
Interest in buying water firms has increased recently
The Royal Bank of Scotland is considering selling Southern Water for around 4bn, according to reports.

The bank said it was "reviewing" the water firm, which it bought four years ago, as part of normal procedures, but would not comment further.

Southern Water, which supplies Kent and Sussex and holds assets of some 2.9bn, said it was "business as usual".

Utilities firms have posted strong profits recently, adding to speculation about sales in the sector.

Wider interest

Interest in the water industry - especially by private equity firms - has risen. They are seen as a source of solid cash generation, say analysts.

While RBS owns a 50% stake in Southern Water, in terms of economic interest this figure is around 90%, due to a complex ownership arrangement.

The private equity arm of RBS is reported to have selected Deutsche Bank to advise on options for Southern Water. Deutsche Bank was unavailable for comment.

Increasing interest in the utilities industry was evident last year when Australia's Macquarie bought Thames Water for a 20% premium on the group's value.

Meanwhile Anglian Water was sold to a group of investors in Britain, Australia and Canada, for a 25% premium.

The speculation around Southern Water comes as a series of water firms are set to post profits this week.

RBS bumps ABN decision to Tuesday
25 May 07 |  Business
ABN Amro boss declines Shell job
14 May 07 |  Business
RBS bank offer 'snubbed' by ABN
07 May 07 |  Business
RBS 'mounts bid' for LaSalle bank
06 May 07 |  Business
ABN Amro sued over bank dispute
04 May 07 |  Business
Court blow to Barclays ABN deal
03 May 07 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific