The board of Severn Trent has reviewed the proposal from a consortium that included Borealis Infrastructure, the Kuwait Investment Office and the British Universities Superannuation Scheme to acquire the firm with its advisers and concluded that it completely fails to recognise the existing and potential value of Severn Trent.

Seven of Britain's 10 water companies are now in the hands of private investors, with Pennon Group, United Utilities and Severn Trent the remaining three listed entities.

A consortium led by Australian investment bank Macquarie bought Thames Water for £8 billion in 2006, in what was then the largest deal in the sector. Last week KKR & Co. announced that it had acquired South Staffordshire Plc, a central England water supplier, from Alinda Capital Partners LLC.

UK water company prices are subject to regulatory review every five years with the next one due in 2015. Bidders can be deterred from making an approach halfway through a cycle, given the uncertainty over the next review.

About the company:

Severn Trent, which is listed on the FTSE 100, is the biggest publicly traded English water company, serving more than seven million people. The value of the company in the stock market is around £5 billion.