Severn Trent receives takeover approach from Kuwait Investment Authority and Canada's Borealis A deal would mean Severn Trent is the latest water company in Britain to be snapped up by foreign investors. In 2006, a consortium led by Australian bank Macquarie won an auction to buy Thames Water for £8bn. A year later, Yorkshire Water owner Kelda Group was sold for $6.3bn (£4.1bn). The group of buyers included Citigroup, Singapore sovereign wealth fund GIC, Infracapital Partners and HSBC. There have been market rumours of a bid in the sector for some time, but the speculation focused on rival United Utilities. However, some analysts argued that because of the uncertain regulatory environment, any M&A among the water companies was unlikely. Peter Atherton, an analyst at Liberum Capital, said that news of the Severn approach was "surprising": "For a potential bid to be made in year three of the five-year regulatory cycle is surprising, and the bidder will be taking on considerable regulatory risk if they pay this sort of premium at this point in the cycle," he said. Borealis, the infrastructure arm of the Ontario Municipal Employees Retirement System, already has a presence in the UK. It owns, among other assets, Associated British Ports and Scotia Gas. The KIA is the Gulf emirate's sovereign wealth fund and was founded to manage the Kuwaiti government's vast finances after the discovery of oil. The Universities Superannuation Scheme is the main retirement scheme provided by Universities, Higher Education and other associated institutions for their employees. It is the second largest private pension scheme in the UK. News of the potential deal comes just a month after Severn Trent chief executive Tony Wray announced he will step down. Mr Wray, who has been with the company for nine years, will leave the company in 2014. Last week Mr Wray said that the "company is in great shape." "We are heading in the right direction," he said. We have more or less recovered from our dim and distant dark days. We are doing all the right things. It is time for me to go and do the other things I want to do in life which I have put on hold for the last eight years.