Canadian and Australian firms have been linked with a potential bid for AWG, the company which owns Anglian Water.
AWG shares soared on Thursday after the firm said it had received an approach from an unnamed party which could result in a takeover bid.
Media reports have suggested a Canadian state pension fund administrator and an Australian fund manager are part of a consortium behind the approach.
Anglian Water serves about six million customers, mainly in eastern England.
Stable earnings
The firm, which employs 9,000 staff across the UK, also owns support services group Morrison.
A consortium including the CPP Investment Board of Canada, Colonial First State of Australia and private equity firm 3i are reported to be interested in the business.
CPP invests money from Canada's state pension fund which is not needed to pay current benefits while Colonial administers just under $100bn of funds globally.
Neither CPP Investment Board nor Colonial First State were available for comment.
Water companies, and other utilities such as power firms, are seen as attractive bid targets as they offer steady and predictable earnings to a wide range of investors.
AWG saw its annual profits triple to £109m in the year to April, helped by a combination of price rises and dry weather boosting demand.
Analysts believe competition regulations make it unlikely that another water company would offer to buy AWG, though they have not discounted further offers coming in from investment companies.
AWG shares were up 0.1% at 1514 pence in early trading on Friday, having closed up more than 10% on Thursday.
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