According to reports in The Telegraph, Goldman Sachs is preparing a £4 billion takeover bid for privately-owned utility Southern Water.

Sources close to the situation said Goldman Sachs has held talks with a number of parties about forming a consortium to bid for Southern Water.

Prudential's Infracapital fund, which was part of the Goldman Sachs consortium that bought Associated British Ports last year, is believed to have been approached, said the Telegraph.

Southern Water was made private by The Royal Bank of Scotland in a £2 billion deal in 2003, but they appointed Deutsche Bank to sell the holding in early 2007.