DJ Severn Trent PLC Recommended Acquisition of Dee Valley Group Plc
Under the terms of the Acquisition, Dee Valley Ordinary Voting Shareholders will receive 1,705 pence in cash per Dee Valley Ordinary Voting Share they hold. The Acquisition includes a comparable cash Offer for the Dee Valley Ordinary Non-Voting Shares priced at 1,601 per share, in accordance with Rule 14 of the Code. The Acquisition values the entire issued ordinary share capital of Dee Valley at approximately GBP78.5 million.
— Dee Valley is a natural fit for Severn Trent as it operates in neighbouring areas in England and Wales.
— Severn Trent intends to maintain a separate Welsh licence for Dee Valley and, subject to regulatory approval, intends that the whole of Severn Trent’s business in Wales will be regulated under Welsh Government Policy.
— Severn Trent is one of the leading water companies and intends to enhance the current service offering for Dee Valley’s customers, including by extending support for vulnerable customers. Dee Valley’s customers will share in half of any wholesale cost efficiencies achieved, which will be reflected in future bills.
— Severn Trent is undertaking an over GBP3 billion investment programme in AMP6. Severn Trent intends to fully support continued investment in infrastructure in the Dee Valley region.
— Severn Trent is confident that, through the application of Severn Trent’s successful operating model, economies of scale and lower cost of financing to the operations of Dee Valley, this will deliver attractive returns to Severn Trent shareholders. The Acquisition is expected to be earnings accretive from completion.
— The Dee Valley Board believes that the terms of the Acquisition are in the best interests of Dee Valley Ordinary Shareholders as a whole and intends to recommend unanimously that:
– Dee Valley Ordinary Voting Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting which are to be convened to approve the Acquisition; and – Dee Valley Ordinary Non-Voting Shareholders accept the Offer.
— The Offer is conditional on the Scheme becoming Effective. However, the Scheme is not conditional on the Offer becoming or being declared unconditional in all respects.
— The Dee Valley Board has withdrawn its recommendation of the acquisition by Ancala and proposes to adjourn the meetings in respect of Ancala’s acquisition.
Commenting on the Acquisition, Liv Garfield, Chief Executive of Severn Trent said:
“The announcement of our purchase of Dee Valley represents an opportunity for Severn Trent to apply its successful operating model for the benefit of customers across an enlarged asset base, in a neighbouring geographic area. We intend to bring real benefits to Dee Valley’s operations and customers by bringing best practice and investment to support and enhance the service the company provides and by sharing the savings we can generate. We are looking forward to engaging with the customers and Welsh regulators and bringing our skills in water services to Dee Valley.”
Commenting on the Acquisition, Jon Schofield, Chairman of Dee Valley said:
“The Board of Dee Valley has reached agreement on the terms of a recommended acquisition of Dee Valley by Severn Trent Water. We believe that the Acquisition provides attractive value to Dee Valley shareholders.”
This summary should be read in conjunction with the full text of the following announcement including the Appendices. The Conditions and certain further terms of the Acquisition are set out in Appendix I to this announcement. Appendix II contains the definitions of certain terms used in this announcement.
— Dee Valley is a natural fit for Severn Trent as it operates in neighbouring areas in England and Wales.
— Severn Trent intends to maintain a separate Welsh licence for Dee Valley and, subject to regulatory approval, intends that the whole of Severn Trent’s business in Wales will be regulated under Welsh Government Policy.
— Severn Trent is one of the leading water companies and intends to enhance the current service offering for Dee Valley’s customers, including by extending support for vulnerable customers. Dee Valley’s customers will share in half of any wholesale cost efficiencies achieved, which will be reflected in future bills.
— Severn Trent is undertaking an over GBP3 billion investment programme in AMP6. Severn Trent intends to fully support continued investment in infrastructure in the Dee Valley region.
— Severn Trent is confident that, through the application of Severn Trent’s successful operating model, economies of scale and lower cost of financing to the operations of Dee Valley, this will deliver attractive returns to Severn Trent shareholders. The Acquisition is expected to be earnings accretive from completion.
— The Dee Valley Board believes that the terms of the Acquisition are in the best interests of Dee Valley Ordinary Shareholders as a whole and intends to recommend unanimously that:
– Dee Valley Ordinary Voting Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting which are to be convened to approve the Acquisition; and – Dee Valley Ordinary Non-Voting Shareholders accept the Offer.
— The Offer is conditional on the Scheme becoming Effective. However, the Scheme is not conditional on the Offer becoming or being declared unconditional in all respects.
— The Dee Valley Board has withdrawn its recommendation of the acquisition by Ancala and proposes to adjourn the meetings in respect of Ancala’s acquisition.
Commenting on the Acquisition, Liv Garfield, Chief Executive of Severn Trent said:
“The announcement of our purchase of Dee Valley represents an opportunity for Severn Trent to apply its successful operating model for the benefit of customers across an enlarged asset base, in a neighbouring geographic area. We intend to bring real benefits to Dee Valley’s operations and customers by bringing best practice and investment to support and enhance the service the company provides and by sharing the savings we can generate. We are looking forward to engaging with the customers and Welsh regulators and bringing our skills in water services to Dee Valley.”
Commenting on the Acquisition, Jon Schofield, Chairman of Dee Valley said:
“The Board of Dee Valley has reached agreement on the terms of a recommended acquisition of Dee Valley by Severn Trent Water. We believe that the Acquisition provides attractive value to Dee Valley shareholders.”
This summary should be read in conjunction with the full text of the following announcement including the Appendices. The Conditions and certain further terms of the Acquisition are set out in Appendix I to this announcement. Appendix II contains the definitions of certain terms used in this announcement.