Hopes dry up for a share bonanza at South West Water with plans for it to become part-publicly owned again
Hopes of a privatisation-style bonanza in South West Water are likely to be dashed
Hopes of a privatisation-style bonanza in South West Water are likely to be dashed as customers could receive as few as three shares per household.
Under plans announced yesterday, the water business is to become part-publicly owned again with customers set to get a £20million stake.
Bosses plan to offer their 800,000 household customers either shares in parent Pennon Group or a new scheme tracking the stock performance of South West.
But at Pennon’s share price of 755p (yesterday down 1.8per cent, or 13.6p), the initial £20million – around 0.6per cent of its £3.2billion market value – would buy around three shares for each customer.
It paid a dividend of 38.57p a share this year.
Pennon, along with other water companies, yesterday submitted five-year business plans to regulator Ofwat.
The sector is under fire for hiking bills, leaks and paying out too much to shareholders.
Jeremy Corbyn has threatened to re-nationalise the industry if Labour win power and environment secretary Michael Gove has lambasted bosses over excessive pay and tax avoidance.