Business
Bristol Water acquisition and shareholder return
Bristol Water acquisition and shareholder return.
About this update from Pennon Group Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 6585A\n Pennon Group PLC\n 03 June 2021\n \n \n \n \n Pennon Group plc\n \n \n 3 June 2021\n \n \n THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION \n \n \n \n \n \n Pennon Group plc\n \n \n \n \n \n Acquisition of the Bristol Water Group and proposed Special Dividend and Share Consolidation\n \n \n \n \n \n Pennon Group plc (Pennon or the Group) is pleased to announce that it has acquired 100% of the issued share capital of Bristol Water Holdings UK Limited and its subsidiaries, including Bristol Water plc (Bristol Water), (together, the Bristol WaterGroup), from its indirect shareholders: infrastructure funds advised by iCON Infrastructure LLP (80% of the shares); and ITOCHU Corporation (20%) for an equity value of £425 million, and an enterprise value of £814[1] million including assumed debt (the Acquisition). Pennon is also announcing a return of capital to shareholders, consisting of a Special Dividend of c.£1.5 billion, and a share buy-back programme of up to £0.4 billion.\n \n \n Highlights\n \n \n ·\n Acquisition of the Bristol Water Group for £425 million cash consideration, adding a high-quality business with approximately 1.2 million customers\n \n \n ·\n Acquisition is expected to be earnings accretive and will result in an increase of c.16% in the Group regulatory capital value (RCV) as at 31 March 2021\n \n \n · \n The acquisition price equates to a premium to RCV of 44%[2]\n \n \n · \n Proposed c.£1.5 billion special dividend and share consolidation, and a proposed share buyback programme of up to £0.4 billion\n \n \n ·\n Following the Acquisition and the return of capital to shareholders, the Group is targeting net debt to RCV gearing of below 65% by the end of K7[3]\n \n \n ·\n The Board has decided to increase the Group's dividend level by c.9% (equivalent to an increase of 2 pence per share on a pre-consolidation basis) from 2021/22 onwards, and to continue its sector-leading dividend policy of CPIH + 2% growth.\n \n \n \n \n \n Commenting on the Acquisition, Susan Davy, Group Chief Executive said:\n \n \n \n \n \n 'The acquisition of Bristol Water brings great people and a great business to Pennon and I am hugely excited about building a future together. We see attractive opportunities to continue to invest in the Bristol Water business to delive...