Yorkshire Water News Update: Goldman Sach Merge
Yorkshire Water News Update: YW are speculated by the Yorkshire Post’s reporting to be joining partnerships with the US investment giant Goldman Sachs. Currently, Goldman’s have declined comment on the situation and Yorkshire Water have said they do not comment on speculation. This article was taken as an extract from The Yorkshire Post at http://www.yorkshirepost.co.uk/business/business-news/goldman-sachs-and-allianz-plan-yorkshire-water-bid-1-5921317 by an apparent ghost writer on the 5th of August.
GOLDMAN Sachs, the US investment bank, and Allianz, Europe’s largest insurer, are joining forces to make a £2bn bid for a 30 per cent stake in Yorkshire Water.
They are expected to face stiff competition for the shareholding as the Bradford-based utility is highly profitable, although water companies are starting to face greater scrutiny.
Yorkshire Water has come under fire from MPs after paying no corporation tax last year in spite of making £186m in profits and paying dividends of £256m to its investors.
Citigroup is selling 17 per cent of its 37 per cent stake in the business, while fund manager M&G is selling its 13 per cent holding, according to The Sunday Times. Bids are due next month, added the newspaper.
A spokeswoman for Goldman Sachs declined to comment.
A spokeswoman for Yorkshire Water said: “The company does not comment on speculation.”
In a three-year period since being taken private by a consortium of international investors in 2008, Yorkshire Water generated £2.6bn in turnover and £990m in operating profits and yet received a net tax credit of £46.2m, according to the Tory MP Charlie Elphicke.
He singled out the firm for “abusing” the interest deduction system and called on regulators to examine whether water companies are receiving too high a return and if they should be subject to a windfall tax or forced to reduce customers’ bills.
The report asks the question on whether or not this will be beneficial to the company. After being accused of paying no corporation tax even though they made nearly £200 million it is a curious decision to merge with a company in an industry notorious for manipulating the tax systems. In this economic climate the extra investment and support from such a large company may help leverage Yorkshire Water over the competition.
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