City analysts said they still expect takeover deals in the utilities sector despite the current regulatory review in the water sector, according to the London Evening Standard (LES).
Ofwat has laid out its methodology for setting price limits in the next regulatory period 2015-2020 (PR14) and in the last few months some analysts have said there will be no more M&A activity in the coming months.
Just this summer, Severn Trent rejected a takeover bid from the LongRivers consortium, headed by Canadian infrastructure fund Borealis.
However, analysts at JP Morgan have said not to rule out M&A in the sector because of low borrowing costs and there is “no immediate risk of the regulator” preventing a company from further gearing up.
JPMorgan’s Edmund Reid highlighted water and waste group Pennon as one to watch. He said its “waste business offers both structural growth and the potential for cyclical upside”, and raised it to Buy, up from neutral, with a 745p target.
The recommendation helped Pennon’s share price rise 9p to 690p. It has been a rumoured takeover target for some time, with traders speculating France’s Veolia could be interested, the LES reported. Some have suggested Pennon’s waste subsidiary Viridor is a target.
Reid also raised his target price for Severn Trent and United Utilities.
Enpure Ltd and Clean TeQ Water Ltd have announced a collaboration agreement to bring Clean TeQ Water's Moving Bed Ion Exchange-based nutrient removal technologies to water utilities across the UK.
Near-real-time microbial monitoring of wastewater discharge and bathing waters is now possible thanks to the BactoSense ID solution created by Swiss-based bNovate Technologies.
ABB has launched AquaMaster+™, a digital platform for smart water network management, designed to help water utilities monitor, analyze and manage their water networks, preventing pipeline water losses and optimizing operations.
Craig Nienaber, Business Development Manager for Safe Access Solutions (SAS) at HUBER Technology, explores why the company is seeing a growing level of interest in its safe access solutions for critical infrastructure providers, including their application in wastewater treatment assets.
Southern Water has released film and images showing what it’s like to walk inside Hampshire’s expanded Yew Hill underground reservoir for the very last time, before it gets filled with water.
Hear how Scottish Water has completed its £235 million Ayrshire Glasgow Resilience Project - customers across Greater Glasgow, Ayrshire and East Renfrewshire will now benefit from a more secure and resilient water supply.
Hear how United Utilities is accelerating its investment to reduce spills from storm overflows across the Northwest.