Severn Trent today spurned a second takeover approach from an overseas consortium saying the £5 billion bid again fails to recognise the water company's value.
The group, which supplies 4.2 million households and customers across the Midlands and parts of Wales, said the 2079.49p per share bid offers only a 16% premium to its share price before takeover interest became known.
Severn turned down the £4.96 billion approach from the LongRiver consortium, which features Canadian investment group Borealis, the Kuwait Investment Office and Universities Superannuation Scheme, after last month rejecting an offer of an undisclosed value.
But shares in the water group were unchanged today as investors continue to price in a return by the consortium.
Severn said the offer assumed a final dividend of 45.51p was not paid to shareholders - and including this planned payout was priced at 2125p.
Chairman Andrew Duff said: "The board unanimously believes that LongRiver's revised conditional proposal at 2,079.49 pence per share, excluding the final dividend which we have already announced, fails to value the attractions to Severn Trent's shareholders of Severn Trent's increasingly rare combination of yield, inflation-linked business model and potential."
LongRiver has until June 11 to announce plans for a firm offer, or walk away.
British water companies are prized by investors such as pension funds, sovereign wealth groups and private equity firms for their monopoly over customers and relatively stable earnings, which are tied to inflation.
Severn is the latest British utility to attract interest after buyouts for rivals Yorkshire Water, Northumbrian Water and Thames Water. That leaves just Severn, United Utilities and Pennon as the remaining water companies on the public markets.
Borealis already co-owns the UK's biggest ports operator Associated British Ports and the London to Paris High Speed 1 rail line. It invests on behalf of thousands of Canadian workers and pensioners in the Ontario Municipal Employees Retirement System.
The Kuwait Investment Authority invests the emirate's vast oil wealth, while the Universities Superannuation Scheme invests the pensions of UK higher education workers.
Severn's rejection of the bid follows its recent update that underlying pre-tax profits slipped 3.3% to a worse-than-expected £266.3 million in the year to the end of March.
Profits fell after it hiked investment in its network by 17% to £555 million and said commercial customers, such as farmers, used less water during a rainy summer - hitting water consumption by 1.4%.
Despite this Severn hiked its full-year dividend by 8.2% and said dividends will grow 6% in its new financial year.
The timing of the buyout approach has surprised analysts given that regulator Ofwat rules on prices every five years and will next year decide how much bills should rise by between 2015 and 2020.
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