CAMPAIGNS: Water firm's speedy float helped by PR - Financial PR

Client: Northumbrian Water PR Team: Finsbury Campaign: Acquisition and subsequent listing Timescale: May 2003 Budget: Undisclosed

On Thursday 15 May, Finsbury received a call inviting it to pitch at 8am the following morning at the offices of City lawyers Linklaters. The client was a consortium comprising Deutsche Bank, brokers Collins Stewart and investment advisory firm Ecofin, working on the £2.2bn acquisition of Northumbrian Water from Suez.

At the end of its pitch, Finsbury was appointed on the spot and had to start work straight away from Linklaters's offices.

'We never actually left the pitch,' said Finsbury senior account executive Anthony Silverman. 'The process happened so quickly. We had to get up to speed on Northumbrian's business very fast.'

Objectives

To purchase Northumbrian Water and float the company on the Alternative Investment Market (AIM) as soon as possible.

Strategy and Plan

The purchasing consortium proposed a deal in which the majority of the transaction would be financed through debt, and one third through equity.

The equity element required Northumbrian to be floated as soon after the acquisition as possible. Speed was of the essence.

The deal was signed just before midnight on Friday 16 May. The timing meant that Finsbury's usual utilities media contacts were not around.

The agency therefore had to explain in great detail not only the structure of the deal, but also the way the UK M&A market and water industry worked.

On Saturday Finsbury followed up with the nationals, in particular the Sundays. This proved more straightforward, although explaining the structure of the deal remained the most complicated aspect.

Once coverage of the acquisition had died down by Tuesday, the comms remit changed to concentrate on the merits of Northumbrian as an investment.

The AIM authorities had given permission for the company to list on the exchange within five working days - normally it is ten - allowing the flotation to proceed on Friday 23 May.

Measurement and Evaluation

On the Monday after the deal was struck, a piece ran in the Financial Times's influential Lex column, taking the view that the transaction represented good value. Once the story switched to focus on the stock market listing, another positive Lex piece followed, drawing attention to Northumbrian's strong yield and applauding a UK water company for coming back to the market. These sentiments were echoed in a similarly positive Tempus piece in The Times.

Results

Positive investment stories run by key media outlets were vindicated by a 9.5 per cent rise in Northumbrian's share price on the day of the AIM listing. However, water industry regulator Ofwat has since published proposals to change Northumbrian's licence to bring it into line with other water companies and wants it to improve its credit rating.

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