3i Infrastructure sells Anglia Water stake for 37pc premium

3i Infrastructure is mulling a cash return to shareholders after agreeing the £395m sale of its stake in Anglian Water Group.

The sale to a consortium of Dalmore Capital and an infrastructure investment joint venture between five local government pension funds is expected in early 2018 once certain third party consents have been received.

The estimated sale price is a 37% premium to the £288m book valuation at 30 September 2017.

3i Infrastructure acquired its stake among those made as part of its initial public offer in 2007, with AWG taken private the prior year by a consortium of investors.

Chairman Richard Laing said: "AWG was part of 3i Infrastructure's seed portfolio and has proved a good investment for the Company over the past ten years.

"We believe that now is an appropriate time for the company to realise its stake. Subject to completion of this sale and that of Elenia, 3i Infrastructure expects to have a significant cash balance by the end of the first quarter of 2018.

"Consistent with our policy of managing our balance sheet efficiently, the board of directors will be considering the potential for returning surplus cash to shareholders."

3i's managing partner Phil White added: "We have developed a good pipeline of potential opportunities for 3i Infrastructure that are consistent with the company's return objectives, and we expect to progress several of these over the coming months."