Macquarie bags stake in Southern Water, bank reports

Australia-based asset manager, Macquarie Infrastructure and Real Assets has taken a minority stake in Southern Water according to the Royal Bank of Canada European (RBC).

The bank cited “sources familiar with the situation” saying Macquarie has been selected as preferred bidder for Southern Water and a deal was expected to be signed in the coming weeks. Reports in May had Macquarie as one of the final two shortlisted bidders.

Southern Water launched the equity offer earlier this year to reduce debt at the business, which is currently leveraged at around 70% of its regulatory capital value of just over £5bn said RBC. The bank quoted news service, inframation saying the stake will be new equity rather than any of the shareholders selling down.

RBC reported: “a relatively high level of activity in the UK water space and note that unconfirmed reports by inframation suggest that other companies such as Thames Water and Anglian Water may also be in the process of selling minority stakes.”