£435m for water and gas company

Shares in the firm have risen by more than 10%

A company which supplies water to south east England and gas to Northern Ireland is likely to be sold to a businessman for more than £400m.

Multi-millionaire Guy Hands' offer is for East Surrey Holdings, which includes Sutton and East Surrey Water and Phoenix Natural Gas.

Mr Hands said his business, Terra Firms Investment, is keen to buy companies which operate basic industries.

The deal is yet to be approved but could go ahead by the end of June.

Landfill sites

Redhill-based East Surrey supplies water to homes in East Surrey, parts of Kent and Sussex and south London.

Phoenix Natural Gas supplies gas to households in the greater Belfast area.

Shares in East Surrey rose by 48 pence to £5.23 on Thursday when it said it was in talks about a possible offer and had risen another six pence on Friday.

Under the plans, East Surrey's directors will remain at the company.

Previous companies bought by Terra Firma include waste recycling and landfill sites.

The company also owns Odeon and UCI cinemas.

Mr Hands said: "East Surrey Holdings fits perfectly with our investment strategy of targeting asset-intensive businesses with strong and reliable cashflows operating in basic service industries."