Severn Trent has published details of the full terms and conditions of its proposed acquisition of Dee Valley Water, together with the recommended actions to be taken by Dee Valley ordinary shareholders.
.The Severn Trent Acquisition Document contains a unanimous recommendation from the Dee Valley Board that:
- all voting ordinary shareholders vote in favour of Severn Trent's scheme; and
- all non-voting ordinary shareholders accept the Severn Trent contractual offer.
Severn Trent said that if Dee Valley ordinary shareholders would like to receive the “significantly higher consideration” offered by Severn Trent than that offered by Ancala they should continue to take no action in respect of the Ancala revised proposal nor should they sell their shares to Ancala.
All Dee Valley voting ordinary shareholders and non-voting ordinary shareholders are being strongly urged to vote in favour of Severn Trent's Scheme and Contractual Offer for their shares.
On 23 November 2016 Severn Trent made a revised proposal to acquire all of the issued Dee Valley Ordinary Shares which the Dee Valley Board has recommended.
Under the terms of the acquisition, the holders of Dee Valley Voting Ordinary Shares will receive 1,825 pence in cash for each Dee Valley Voting Ordinary Share held and the holders of Dee Valley Non-Voting Ordinary Shares will receive 1,713 pence in cash for each Dee Valley Non-Voting Ordinary Share held.
Severn Trent's offer is significantly higher than Ancala's offer of 1,706 pence for each Dee Valley Voting Ordinary Share and 1,602 pence for each Dee Valley Non-Voting Ordinary Share.
Future plans for Dee Valley
Setting out its future plans for Dee Valley, Severn Trent said it will be a supportive long term owner of Dee Valley as the local water business for its area.
Severn Trent also intends to maintain the Welsh identity, heritage and local focus of Dee Valley. Subject to regulatory approvals, the utility intends to maintain a separate Welsh licence for Dee Valley and that the whole of its business in Wales will be regulated under Welsh Government Policy. Severn Trent will also extend its existing community programme to the Dee Valley water area.
Severn Trent believes that the Acquisition would provide a successful outcome for customers of Dee Valley, saying it plans to build on Dee Valley's great customer service by applying an improved proposition for Dee Valley's customers. This will include enhancing the customer service offering by extending support and, in due course, service hours, and through the application of Severn Trent's digital philosophy.
Employees and locations - skills and expertise of Dee Valley staff will be "preserved where possible"
Severn Trent said it attaches great importance to the skills, operational experience and technical expertise of the employees of Dee Valley.
It intends to retain all Dee Valley employees engaged in front line field force operations and will continue to operate these out of Dee Valley's current locations in Wrexham and Chester. Employees engaged in front line field force operations comprise the majority of Dee Valley's employees and include those front line activities within operations, operational control, maintenance and construction of the network and treatment works.
Its plan is to integrate Dee Valley employees with engineering, asset management and programme management roles into Severn Trent's wider teams.
Severn Trent said:
“Severn Trent is committed to keeping customers at the heart of our business and we will work with the Dee Valley customer contact centre operations team to ensure that the local customer focus, skills and expertise of Dee Valley staff are preserved where possible, while taking advantage of the capabilities of the combined group.”
It will also perform a review of how best to integrate the managerial, administrative and support services of Dee Valley into the Severn Trent Group in order to achieve the expected benefits of the Acquisition.
Severn Trent believes that there will be “some element of duplication of some managerial, administrative and support services which will involve headcount reductions and/or changes in location in Dee Valley's operations going forward.”
The firm said it would work constructively with union representatives in line with its past track record.
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