macquarie joins jp morgan in southern water fi

Macquarie joins JP Morgan in Southern Water fight
By Ben Harrington
Last Updated: 1:02am BST 06/09/2007



Australian infrastructure investment group Macquarie is set to team up with US bank JP Morgan in the £4bn bid battle for Southern Water.

JP Morgan Asset Management's infrastructure investment fund has been in advanced talks to submit a joint offer with Macquarie and several other smaller funds, according to well-placed sources.

Macquarie's move may arouse controversy as it already owns Thames Water, which it bought last year as part of a consortium for £8bn from German power company RWE, and regulators have typically opposed the ownership of more than one large water utility by any owner, or group of owners.

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But it is understood that Macquarie is acting primarily as an adviser to a consortium, although its funds could also take a small slice of equity.

Royal Bank of Scotland appointed Deutsche Bank to sell Southern Water earlier in the year. First-round bids were due at the end of August. Other bidders include a consortium led by Goldman Sachs, which is said to include GE and Prudential's infrastructure investment wing Infracapital Partners.

Deutsche's infrastructure group Rreef and Morgan Stanley's new fund are also said to have made offers. Macquarie and JP Morgan both declined to comment.