Bloomberg News

Li Ka-shing’s CKI Weighing Bid for Britain’s Northumbrian Water

June 27, 2011

June 28 (Bloomberg) -- Cheung Kong Infrastructure Holdings Ltd. said it’s in the preliminary stages of assessing a possible cash offer for the U.K.’s Northumbrian Water Group Plc.

Northumbrian shares jumped 30.5 pence, or 8 percent, to 413.5 pence in London yesterday, valuing the Durham, England- based company at 2.1 billion pounds ($3.4 billion).

CKI, controlled by Hong Kong billionaire Li Ka-shing, led a consortium to buy Electricite de France SA’s U.K. power networks for 5.8 billion pounds in July 2010. The billionaire has been snapping up power, water and road assets in Australia, Canada and the U.K. to counter price curbs in Hong Kong’s power market. Hongkong Electric has assets in countries including China, Thailand and New Zealand.

The March purchase by U.S.-based PPL Corp. of EON AG’s power grid suggests CKI may pay as much as 430 pence a share for Northumbrian, Unicredit analyst Scott Phillips said in a note to investors yesteroday. The transaction would “make sense” given that “CKI missed out on the bid for EON’s Central Networks,” Phillips said.

There can be no certainty an offer will be made, Hong Kong- based CKI said in a statement yesterday.

Northumbrian Water serves a population of 2.6 million people in northeast England with water and sewerage services and about 1.7 million people in southeast England with water. Before yesterday’s announcement, the utility’s shares had risen 16 percent this year, boosted by speculation that the Ontario Teachers’ Pension Plan is considering increasing its holding. The pension plan controls a 27 percent stake in the water utility.

Northumbrian Water has noted the announcement from CKI, and its board confirms that it has not received any proposal that could result in an offer or possible offer for the company, it said in a statement yesterday.

--Editors: Ben Livesey, John Simpson

To contact the reporters on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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