United Utilities has hired Goldman Sachs to prepare its defence against a possible £7bn takeover amid speculation that foreign buyers are about to make a move.

According to reports in the Sunday Times, the water company is bolstering its defences after several months of rumours about a foreign consortium making a bid for the FTSE 100 company.

The newspaper reported that sources said the decision to appoint Goldman as defence adviser was simply part of a periodic review. UU has declined to comment.

Shares in the water company have risen 7% this year amid persistent rumours that a consortium will bid for the utility, which would be the biggest takeover of a UK listed company since private equity firm KKR took Alliance Boots off the stock market for £11bn in 2008.

United Utilities has a market value of around £5bn, the largest of the remaining publicly quoted water companies in the UK.

There have also recently been rumours that the Abu Dhabi Investment Group is considering a bid for other publicly listed company Pennon Group, parent of South West Water.