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Severn Trent plc Post-transaction report

Post-transaction report

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.

Consultation

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.

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 Primary Bid 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.