The announcement to the Stock Exchange came after the Kelda Group, which owns a 46% share of WRG, said it has entered into exclusive talks with Terra Firm for its stake in WRG.
Terra Firma Investments is a private equity fund established by Guy Hands, formerly of Nomura, in March 2002. It has raised 1.5 billion in its first 12 months.
Kelda, which owns Yorkshire Water, said that it will not talk to any other potential buyers until June 5 2003. The company has said it will not accept an offer for its shares for less than 285p, valuing its stake in WRG at about 150 million.
Commenting on the agreement, John Napier, Chairman of Kelda said:
“Kelda's strategy is to focus on water and waste water businesses in the UK and the US. We have held our shares in WRG as an investment. WRG has been the subject of press speculation for some time, and entering into this agreement with Terra Firma will add some certainty to the situation. If an offer is subsequently forthcoming, this will be to the benefit of Kelda's shareholders.”
The exclusivity agreement for the talks between Terra Firma and WRG will run for eight weeks, starting yesterday.
A city analyst told letsrecycle.com: “There's a lot of interest in the waste and recycling sector at the moment because there's a feeling in the City that the greater legislation coming in for recycling means huge cost benefits are available, and that means profits.”
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