As leading shares remain in positive territory as UK data and Bank of England comments suggest no early rise in interest rates, Severn Trent is outperforming the general trend.
The utility group has announced it is selling its majority share in its water purification business to its joint venture partner, Italy’s Industrie De Nora.
It will receive a total of £50.8m for its share, with £12.6m in cash and the rest the repayment of intercompany debt. The deal values the whole purification business at £61.9m.
The news has lifted Severn Trent’s shares by 24p or 1.1% to £21.50, compared to a 0.5% rise on the FTSE 100.
Analyst Angelos Anastasiou at Whitman Howard said:
This seems to us to be a good price and a reasonable deal, freeing up some cash, and allowing Severn Trent to focus on its remaining non-regulated activities including non-household retail and renewable energy.
