Infrastructure investment drives 3i and GE plans
Infrastructure investments are flavour of the month, with private equity firm 3i preparing to float an infrastructure fund and General Electric planning to buy a water business.
Private equity firm 3i said on Tuesday it would list 3i Infrastructure on the London Stock Exchange with the aim of raising between 700 million and 1.3 billion pounds.
Later the same day, General Electric said it would acquire a 95 percent stake in Idex Aquaservices, a French water purification company. Terms of the deal were not disclosed.
An increasing number of financial bidders and private equity firms are investing in the traditionally low-growth utility and infrastructure sectors as they seek stable cash flows they can securitize to pay off interest on bonds.
3i Infrastructure, which has bid for broadcast mast businesses and water companies, said it intended to build a diversified portfolio of equity investments in entities that own infrastructure businesses and assets.
Shares in 3i Group, which at the end of September had 7.5 billion pounds of assets under management, rose about 1 percent to 115 1/2 pence.
3i said it would issue one warrant for every 10 shares purchased under the offering, with each warrant entitling the holder to subscribe for one additional share at the offer price from six months to five years after the listing.
The firm intends to invest 325 million pounds in the company, subject to raising a minimum of 700 million pounds.
3i Infrastructure will acquire an interest in substantially all of 3i Group's infrastructure investments, which include AWG, owner of Anglian Water, and private finance initiative projects such as Norfolk and Norwich Hospital.
Citigroup has been appointed sole global coordinator, sponsor and underwriter for the offering, which is scheduled to close during the first half of March.
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