REG - Severn Trent PLC - Results of the Equity Issue

Severn TrentAnnouncement

29/09/2023 14:30

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RNS Number : 2231O  Severn Trent PLC  29 September 2023

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL
FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

For immediate release

 

29 September 2023

 

Severn Trent Plc

("Severn Trent", the "Company" or the "Group")

 

Results of the Equity Issue
Severn Trent Plc successfully raises £1 billion of new equity

 

Severn Trent announces the successful pricing of the non-pre-emptive placing
of new ordinary shares of 97(17/19) pence each in the capital of the Company
("New Ordinary Shares") announced earlier today (the "Placing").

 

A total of 22,922,277 New Ordinary Shares (the "Placing Shares") have been
placed with institutional investors by Merrill Lynch International ("BofA
Securities"), Morgan Stanley & Co. International ("Morgan Stanley"), and
Citigroup Global Markets Limited ("Citi", together with BofA Securities and
Morgan Stanley, the "Joint Bookrunners") at a price of 2,150 pence per Placing
Share (the "Placing Price") raising gross proceeds of approximately £493
million.

 

Concurrently with the Placing, retail investors in the UK have subscribed in
the offer made by the Company via the PrimaryBid platform for a total of
320,750 New Ordinary Shares (the "Retail Offer Shares") at the Placing Price
(the "Retail Offer") raising gross proceeds of approximately £7 million.

 

Additionally, certain directors of the Company have subscribed for Ordinary
Shares for a total of 12,787 New Ordinary Shares (the "Director Subscription
Shares") at the Placing Price (the "Director Subscription") raising gross
proceeds of approximately £275,000.

 

The Placing, Retail Offer, and Director Subscription in aggregate comprise
23,255,814 New Ordinary Shares, and will raise gross proceeds of approximately
£500 million.

 

The Subscription by Qatar Investment Authority ("QIA") for 23,255,814 New
Ordinary Shares (the "Subscription Shares") at the Placing Price will raise
proceeds of approximately £500 million.

 

As a result, the Placing, Retail Offer, Director Subscription and Subscription
(together, the "Equity Issue") will raise total gross proceeds of
approximately £1 billion.

 

The Placing Price of 2,150 pence represents a discount of approximately 5.1
per cent to the closing share price of 2,265 pence on 28 September 2023 and a
discount of approximately 7.1 per cent to the middle market price at the time
at which the Company and the Joint Bookrunners agreed the Placing Price.

 

Together, the Placing Shares, Retail Offer Shares, Director Subscription
Shares and Subscription Shares ("New Ordinary Shares") being issued represent
approximately 18.2 per cent of the existing issued ordinary share capital of
Severn Trent prior to the Equity Issue.

 

Applications have been made to the Financial Conduct Authority (the "FCA") and
London Stock Exchange plc (the "LSE") respectively for the admission of the
New Ordinary Shares to the premium listing segment of the Official List of the
FCA and to trading on the main market for listed securities of the LSE
(together, "Admission"). It is expected that Admission will become effective
on or before 8.00 a.m. on 3 October 2023. The Placing is conditional upon,
amongst other things, Admission becoming effective and upon the placing
agreement between the Joint Bookrunners and the Company not being terminated
in accordance with its terms.

 

The New Ordinary Shares, when issued, will be fully paid and will rank pari
passu in all respects with each other and with the existing Ordinary Shares,
including, without limitation, the right to receive all dividends and other
distributions declared, made or paid after the date of issue.

 

Following Admission, the total number of Ordinary Shares in issue in Severn
Trent will be 301,692,002. The Company holds 2,645,984 Ordinary Shares in
treasury, and therefore the total number of voting rights in Severn Trent will
be 299,046,018 following Admission, and this figure may be used by
shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change to
their interest in, Severn Trent under the FCA's Disclosure Guidance and
Transparency Rules.

 

Related party transaction

 

Funds and accounts under management by direct and indirect investment
management subsidiaries of BlackRock Inc. ("BlackRock")" hold more than 10 per
cent. of the issued share capital in the Company. Blackrock is therefore a
substantial shareholder in the Company for the purposes of the Listing Rules
and is considered to be a related party for the purposes of Listing Rules.
BlackRock has agreed to subscribe for 1,598,130 Placing Shares in the Placing,
amounting to a total subscription of approximately £34 million. The
participation in the Placing by BlackRock constitutes a "smaller" related
party transaction and falls within Listing Rule 11.1.10 R(1) and this
announcement is therefore made in accordance with Listing Rule 11.1.10R(2)(c).

 

Director participation

 

Each of the following directors of the Company has agreed to subscribe for the
number of Director Subscription Shares at the Placing Price opposite his or
her name as set out below:

 Director           Number of Director Subscription Shares
 Liv Garfield       4,651
 Christine Hodgson  2,325
 Helen Miles        2,325
 Kevin Beeston      1,162
 John Coghlan       1,162
 Sarah Legg         1,162

 

Capitalised terms used but not defined in this Announcement have the same
meanings as set out in the placing launch announcement released by the Company
earlier today.

 

BofA Securities and Morgan Stanley acted as Joint Global Coordinators and
Joint Corporate Brokers and, together with Citi, acted as Joint Bookrunners in
respect of the Placing.

Rothschild & Co acted as Financial Adviser to the Company.

 

About QIA

QIA is the sovereign wealth fund of the State of Qatar. QIA was founded in
2005 to invest and manage the state reserve funds. QIA is among the largest
and most active sovereign wealth funds globally. QIA invests across a wide
range of asset classes and regions as well as in partnership with leading
institutions around the world to build a global and diversified investment
portfolio with a long-term perspective that can deliver sustainable returns
and contribute to the prosperity of the State of Qatar.

 

The person responsible for making this Announcement on behalf of the Company
is Hannah Woodall-Pagan, Group Company Secretary.

 

This Announcement should be read in its entirety and in conjunction with the
"Important Notices" section below.

 

For further information on the Announcement, please contact:

 

 

 Severn Trent Plc:

 Rachel Martin, Head of Investor Relations   +44 (0)7824 624 011

BofA Securities (Joint Global Coordinator, Joint Bookrunner and Joint Corporate Broker)
+44 (0)20 7628 1000

Peter Luck

Patrick De Loe

Oliver Elias

Alexander Penney

 

Morgan Stanley (Joint Global Coordinator, Joint Bookrunner and Joint Corporate Broker)
+44 (0)20 7425 8000

Ben Grindley

Melissa Godoy

Francesco Puletti

Sean Cox

 

Citi (Joint Bookrunner)
+44 (0)20 7500 5000

Simon Lindsay

Sian Evans

Patrick Evans

Christopher Wren

 

Rothschild & Co (Financial Adviser to Severn Trent Plc)
+44 (0)20 7280 5000

John Deans

Emmet Walsh

Robert Barnes

Colm Burns

 

Media enquiries:

Jonathan Sibun, Teneo +44 (0)20 7353 4200

Press Office, Severn Trent Plc +44 (0)24 7771 5640

Pre-Emption Group Reporting

 

The Placing is a non-pre-emptive issue of equity securities for cash and
accordingly the Company makes the following post transaction report in
accordance with the most recently published Pre-Emption Group Statement of
Principles (2022).

 

 Name of Issuer       Severn Trent plc
 Transaction details  In aggregate, the Equity Issue of 46,511,628 New Ordinary Shares (comprising
                      22,922,277 Placing Shares, 320,750 Retail Offer Shares, 12,787 Director
                      Subscription Shares and 23,255,814 Subscription Shares) represents
                      approximately 18.2% of the Company's issued ordinary share capital. Settlement
                      for the New Ordinary Shares and Admission are expected to take place on or
                      before 8.00 a.m. on 3 October 2023.
 Use of proceeds      The proceeds of the proposed Equity Issue complete the equity contribution to
                      the funding of Severn Trent's business plan for the regulatory period
                      2025-2030 ("AMP8") which Severn Trent intends to submit to Ofwat on 2 October
                      2023. In particular, the plan and Equity Issue will ensure Severn Trent is
                      responsibly funded from the outset and ensure robust financial resilience is
                      maintained whilst financing a step-up in investment.
 Quantum of proceeds  In aggregate, the Equity Issue raised gross proceeds of approximately £1
                      billion and net proceeds of approximately £987 million.
 Discount             The Placing Price of 2,150 pence represents a discount of approximately 5.1
                      per cent to the closing share price of 2,265 pence on 28 September 2023 and a
                      discount of approximately 7.1 per cent to the middle market price at the time
                      at which the Company and the Joint Bookrunners agreed the Placing Price.
 Allocations          Soft pre-emption has been adhered to in the allocations process for the
                      Placing. Management was involved in the allocations process, which has been
                      carried out in compliance with the MiFID II Allocation requirements.

                      Allocations made outside of soft pre-emption were preferentially directed
                      towards existing shareholders in excess of their pro rata interests, and
                      wall-crossed accounts.

                      The committed allocation to QIA pursuant to the Subscription recognises the
                      support of QIA to the Company in raising the target gross proceeds of the
                      Equity Issue resulting in a fully funded equity plan for AMP8.
 Consultation         The Joint Bookrunners undertook a pre-launch wall-crossing process, including
                      consultation with major shareholders, to the extent reasonably practicable and
                      permitted by law.
 Retail Investors     The Equity Issue included the Retail Offer, for a total of 320,750 Retail
                      Offer Shares, via the PrimaryBid platform, alongside the Placing.

                      Retail investors, who participated in the Retail Offer, were able to do so at
                      the same Placing Price as all other investors participating in the Equity
                      Issue.

                      The Retail Offer was made available to existing shareholders and new retail
                      investors in the UK. Investors were able to participate through PrimaryBid's
                      platform via its partner network (covering 60+ FCA registered intermediaries)
                      and through PrimaryBid's free-to-use direct channel. Investors had the ability
                      to participate in this transaction through ISAs and SIPPs, as well as General
                      Investment Accounts (GIAs). This combination of participation routes meant
                      that, to the extent practicable on the transaction timetable, eligible UK
                      retail investors had the opportunity to participate alongside institutional
                      investors.

                      Allocations in the Retail Offer were preferentially directed towards existing
                      shareholders in keeping with the principle of soft pre-emption.

 

IMPORTANT NOTICES

No action has been taken by the Company or Merrill Lynch International ("BofA
Securities") or Morgan Stanley & Co. International plc ("Morgan Stanley",
and together with BofA Securities, the "Joint Global Coordinators") or
Citigroup Global Markets Limited ("Citi", and together with the Joint Global
Coordinators, the "Joint Bookrunners") or N.M. Rothschild & Sons Limited
("Rothschild & Co"), or any of their respective Affiliates, or any of its
or their respective agents, directors, officers or employees (collectively,
"Representatives") that would, or which is intended to, permit an offer of the
securities referred to herein or result in the possession or distribution of
this Announcement or any other offering or publicity material relating to the
securities referred to herein in any jurisdiction where action for that
purpose is required. Any failure to comply with these restrictions may
constitute a violation of the securities laws of such jurisdictions. Persons
into whose possession this Announcement comes shall inform themselves about,
and observe, such restrictions.

No prospectus will be made available in connection with the matters contained
in this Announcement and no such prospectus is required (in accordance with
the Prospectus Regulation (EU) 2017/1129 as amended from time to time (the
"Prospectus Regulation") and the Prospectus Regulation as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "UK
Prospectus Regulation") to be published. Persons needing advice should consult
an independent financial adviser.

This Announcement has been issued by and is the sole responsibility of the
Company. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by the Joint Bookrunners or Rothschild & Co or by any of their
respective Affiliates or Representatives as to, or in relation to, the
contents of the information contained in this Announcement or any other
written or oral information made available to or publicly available to any
interested party or its advisers, or any other statement made or purported to
be made by or on behalf of any of the Joint Bookrunners or Rothschild & Co
or any of their respective Affiliates or Representatives in connection with
the Company, the Placing Shares, the Subscription Shares, the Director
Subscription Shares, the Retail Offer Shares, the Placing, the Subscription,
the Director Subscription or the Retail Offer and any liability therefor is
expressly disclaimed. The Joint Bookrunners and Rothschild & Co and each
of their respective Affiliates or Representatives accordingly disclaim all and
any liability, whether arising in tort, contract or otherwise (save as
referred to above) in respect of any statements or other information contained
in this Announcement and no representation or warranty, express or implied, is
made by any of the Joint Bookrunners or Rothschild & Co or any of their
respective Affiliates or Representatives as to the accuracy, completeness or
sufficiency of the information contained in this Announcement.

Members of the public are not eligible to take part in the Placing. This
Announcement and the terms and conditions set out herein are for information
purposes only and are directed at and my only be communicated to (a) in the
European Economic Area ("EEA"), persons who are "qualified investors" within
the meaning of Article 2(e) of Prospectus Regulation (Regulation (EU)
2017/1129) ("Qualified Investors"); and (b) in the United Kingdom, at
Qualified Investors within the meaning of Article 2(e) of the UK Prospectus
Regulation who are also (i) persons having professional experience in matters
relating to investments who fall within the definition of "investment
professionals" in Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the "Order"); (ii) high net worth bodies
corporate, unincorporated associations and partnerships and trustees of high
value trusts as described in Article 49(2) of the Order; or (iii) persons to
whom it may otherwise lawfully be communicated (all such persons together
being referred to as "Relevant Persons").

Any investment or investment activity to which this Announcement relates is
only available to, and will be engaged in only with, Relevant Persons. Persons
distributing this Announcement must satisfy themselves that is lawful to do
so. This Announcement is for information purposes only and shall not
constitute an offer to sell or issue or the solicitation of an offer to buy,
subscribe for or otherwise acquire securities in any jurisdiction in which any
such offer or solicitation would be unlawful. Any failure to comply with this
restriction may constitute a violation of the securities laws of such
jurisdictions. Persons needing advice should consult an independent financial
adviser.

The distribution of this Announcement and the offering, placing and/or issue
of the Placing Shares in certain jurisdictions may be restricted by law. No
action has been taken by the Company or the Joint Bookrunners or Rothschild
& Co or any of their respective Affiliates that would permit an offer of
the Placing Shares or possession or distribution of this Announcement or any
other offering or publicity material relating to such Placing Shares in any
jurisdiction where action for that purpose is required. Persons into whose
possession this announcement comes are required by the Company and the Joint
Bookrunners and Rothschild & Co to inform themselves about and to observe
any such restrictions.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS
NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES AND
POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA
(COLLECTIVELY, THE "UNITED STATES"), AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH
AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE
OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR
INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY
JURISDICTION. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK
EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

This communication is not a public offer of securities for sale in the United
States. The securities referred to herein have not been and will not be
registered under the US Securities Act 1933, as amended (the "Securities Act")
or under the securities laws of any state or other jurisdiction of the United
States, and may not be offered or sold directly or indirectly in or into the
United States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in
compliance with the securities laws of any state or any other jurisdiction of
the United States. The securities referred to herein may not be offered and
sold within the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act.

UK Product Governance Requirements

Solely for the purposes of the product governance requirements of Chapter 3 of
the FCA Handbook Product Intervention and Product Governance Sourcebook (the
"UK MiFIR Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which any
'manufacturer' (for the purposes of the UK MiFIR Product Governance
Requirements) may otherwise have with respect thereto, the Placing Shares have
been subject to a product approval process, which has determined that the
Placing Shares are: (i) compatible with an end target market of retail
investors and investors who meet the criteria of professional clients and
eligible counterparties, each as respectively defined in paragraphs 3.5 and
3.6 of the FCA Handbook Conduct of Business Sourcebook ; and (ii) eligible for
distribution through all permitted distribution channels (the "UK Target
Market Assessment"). Notwithstanding the UK Target Market Assessment,
distributors should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; the Placing Shares offer
no guaranteed income and no capital protection; and an investment in the
Placing Shares is compatible only with investors who do not need a guaranteed
income or capital protection, who (either alone or in conjunction with an
appropriate financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources to be able
to bear any losses that may result therefrom. The UK Target Market Assessment
is without prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Placing. Furthermore, it is
noted that, notwithstanding the UK Target Market Assessment, BofA Securities,
Citi and Morgan Stanley will only procure investors who meet the criteria of
professional clients and eligible counterparties.

For the avoidance of doubt, the UK Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for the
purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of
Business Sourcebook; or (b) a recommendation to any investor or group of
investors to invest in, or purchase or take any other action whatsoever with
respect to the Placing Shares. Each distributor is responsible for undertaking
its own target market assessment in respect of the securities referred to
herein and determining appropriate distribution channels.

EU Product Governance Requirements

Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended, ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing Shares have
been subject to a product approval process, which has determined that such
Placing Shares are: (i) compatible with an end target market of retail
investors and investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the "Target Market Assessment"). Notwithstanding the Target Market
Assessment, distributors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an investment
in the Placing Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in conjunction
with an appropriate financial or other adviser) are capable of evaluating the
merits and risks of such an investment and who have sufficient resources to be
able to bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any contractual, legal
or regulatory selling restrictions in relation to the Placing. Furthermore, it
is noted that, notwithstanding the Target Market Assessment, BofA Securities,
Citi and Morgan Stanley will only procure investors who meet the criteria of
professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of MiFID
II; or (b) a recommendation to any investor or group of investors to invest
in, or purchase, or take any other action whatsoever with respect to the
Placing Shares. Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining appropriate
distribution channels.

Forward looking information

This Announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's current expectations and projections
about future performance, anticipated events or trends and other matters that
are not historical facts. These forward-looking statements, which sometimes
use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate",
"expect" and words of similar meaning, include all matters that are not
historical facts and reflect the directors' beliefs and expectations and
involve a number of risks, uncertainties and assumptions that could cause
actual results and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking statement.
These statements are subject to unknown risks, uncertainties and other
factors, many of which are beyond the Company's control, that could cause
actual results to differ materially from those expressed or implied by such
forward-looking statements. Statements contained in this Announcement
regarding past trends or activities should not be taken as a representation
that such trends or activities will continue in the future. The information
contained in this Announcement is subject to change without notice and, except
as required by applicable law, neither the Company nor the Joint Bookrunners
or Rothschild & Co assume any responsibility or obligation and each
expressly disclaim any obligation or undertaking to update publicly or review
any of the forward-looking statements contained herein, whether as a result of
new information, future events or otherwise, unless required to do so by
applicable law or regulation. The final PR24 Business Plan is subject to
approval by Ofwat and there can be no assurance that the PR24 Business Plan
will be approved, in whole or in part. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
Announcement.

Any indication in this Announcement of the price at which ordinary shares have
been bought or sold in the past cannot be relied upon as a guide to future
performance. No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this Announcement
should be interpreted to mean that earnings, earnings per share or income,
cash flow from operations or free cash flow for the Company, as appropriate,
for the current or future years would necessarily match or exceed the
historical published earnings, earnings per share or income, cash flow from
operations or free cash flow for the Company. Past performance is no guide for
future performance and persons reading this Announcement should consult an
independent financial adviser.

This Announcement does not constitute a recommendation to acquire any
securities of the Company. This Announcement does not identify or suggest, or
purport to identify or suggest, the risks (direct or indirect) that may be
associated with an investment in the Placing Shares. Any investment decision
to buy Placing Shares in the Placing must be made solely on the basis of
publicly available information, which has not been independently verified by
the Joint Bookrunners or Rothschild & Co.

Persons (including, without limitation, nominees and trustees) who have a
contractual or other legal obligation to forward a copy of this Announcement
should seek appropriate advice before taking any action.

BofA Securities, Citi and Morgan Stanley are each authorised by the Prudential
Regulatory Authority and regulated in the United Kingdom by the Prudential
Regulation Authority and the Financial Conduct Authority. Each of BofA
Securities, Citi and Morgan Stanley is acting exclusively for the Company and
no one else in connection with the Placing, the content of this Announcement
and other matters described in this Announcement. BofA Securities, Citi and
Morgan Stanley will not regard any other person as their respective clients in
relation to the Placing, the content of this Announcement and other matters
described in this Announcement and will not be responsible to anyone
(including any placees) other than the Company for providing the protections
afforded to their respective clients or for providing advice to any other
person in relation to the Placing, the content of this Announcement or any
other matters referred to in this Announcement.

In connection with the Placing, each of BofA Securities, Citi and Morgan
Stanley and any of their Affiliates, acting as investors for their own
account, may take up a portion of the shares in the Placing as a principal
position and in that capacity may retain, purchase, sell, offer to sell for
their own accounts such shares and other securities of the Company or related
investments in connection with the Placing or otherwise. Accordingly,
references to Placing Shares being offered, acquired, placed or otherwise
dealt in should be read as including any issue or offer to, or acquisition,
placing or dealing by, the Joint Bookrunners and any of their Affiliates
acting in such capacity. In addition, the Joint Bookrunners and any of their
Affiliates may enter into financing arrangements (including swaps) with
investors in connection with which the Joint Bookrunners and any of their
respective Affiliates may from time to time acquire, hold or dispose of
shares. The Joint Bookrunners do not intend to disclose the extent of any such
investment or transactions otherwise than in accordance with any legal or
regulatory obligations to do so. The Joint Bookrunners are not acting for the
Company with respect to the Retail Offer.

The most recent Annual Report of the Group and other information about the
Group are available on the Severn Trent website at www.severntrent.com.
Neither the contents of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into or forms part of this Announcement.
The Placing Shares to be issued or sold pursuant to the Placing will not be
admitted to trading on any stock exchange other than the London Stock
Exchange.

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