Deal could leave Southern Water in Vivendi Environnement's hands
PARIS, France, March 8, 2002 -- First Aqua has announced that it has reached an agreement to acquire Southern Water from Scottish Power for a total consideration of £2,050 million subject to the satisfaction of certain conditions.
Following completion of First Aqua's purchase of Southern Water, Vivendi Environnement, a water and waste water operator, may be offered the opportunity to buy Southern Water's holding company on an enterprise value basis equal to that reflected in First Aqua's purchase of Southern Water. There can be however no certainty that First Aqua will offer Southern Water to Vivendi Environnement.
Vivendi Environnement considers Southern Water to be one of the most attractive propositions in the UK, serving a population of approximately 4.4 millions inhabitants with £421.6 millions sales as of March 2001. Southern Water is active in the UK water and sewerage market and would be complementary to Vivendi Environnement activities in the UK.
Therefore, in the event First Aqua were to offer Vivendi Environnement the opportunity to buy Southern Water, Vivendi Environnement would consider carefully the proposition. Any proposed acquisition would, however, be conditional, amongst other things, on Competition Commission clearance and successful long term non recourse financing. For this financing, if Vivendi Environnement were to enter into a future purchase of Southern Water, Vivendi Environnement would seek to involve financial participants.
Vivendi Environnement has entered into a put and call option agreement with private and institutional investors who agreed to subscribe for non-voting preference shares from First Aqua pursuant to which those preference shares can be put onto Vivendi Environnement on the third anniversary of the completion of First Aqua's acquisition of Southern Water for up to a maximum exposure of £374 million, subject to limited interest rates adjustments between today and the completion of the acquisition by First Aqua of Southern Water.
However, if First Aqua does not offer Vivendi Environnement the opportunity to buy Southern Water within six months of its acquisition by First Aqua, the put will lapse. No rights under the put and call option may be exercised until and unless First Aqua completes its acquisition of Southern Water.
Other than the put and call option described above, Vivendi Environnement has no right or obligations with respect to shares in any member of the First Aqua group or in respect of Southern Water.
Vivendi Environnement (Paris Bourse: VIE and NYSE: VE), comprises Vivendi Water (worldwide water products and services), Onyx (solid waste and industrial services), Dalkia (energy services), Connex (transportation) and FCC (Spanish company engaged in environmental and construction related industries), is the largest environmental services company in the world, with consolidated sales of E29.1 billion as of December 31, 2001 and a market capitalisation of more than E12 billion.
