NORTHUMBRIAN Water announced today that it has reached agreement with the Hong Kong company which is offering £2.4bn to take over the group.

The Durham-based business is recommending the 465p a share cash offer to its shareholders, calling it an “attractive premium”.

UK Water, a company owned by Hong Kong-based Cheung Kong Infrastructure Holdings Limited (CKI), has been set up to take over Northumbrian. CKI has also sidestepped any potential competition issues by selling Cambridge Water to HSBC.

Northumbrian’s biggest shareholder, the Ontario Teachers Pension Plan Board, which owns almost 27% of the company, has agreed to vote in favour of the takeover and given undertakings not to mount a rival bid.

HL Kam, CKI managing director said: “Northumbrian has an excellent reputation in the UK water sector. We attach great importance to the skills and experience of the existing management and employees of Northumbrian and believe they will be an important factor in the continuing success of the Northumbrian Group.

“Through our experience with CKI’s other businesses in the UK – including UK Power Networks in London, Eastern England and South East England; Seabank Power in Bristol; and Northern Gas Networks in Northern England – we appreciate the critical importance of Northumbrian’s business to the communities it serves.”

Northumbrian chairman, Sir Neville Wanless, said: “The offer represents an attractive premium to both the regulated capital value of Northumbrian Water Limited and the company's share price before recent speculation began.

“The directors believe that, whilst Northumbrian would have a strong future as an independent company, the consortium’s offer to Northumbrian shareholders fairly values the current and future prospects of the company.

“The directors also welcome the statements that the Consortium has made with respect to Northumbrian’s management and employees, its location of business and its support for the communities it serves.”