Water company Severn Trent are expecting to receive a new increased takeover offer from a group of international investors, after the rejection of an offer at £21 per share.

An investor consortium consisting of Canadian group Borealis Infrastructure Management, the Kuwaiti Investment Office, and the UK Universities Superannuation Scheme, had their initial offer of around £4.7 billion rejected outright.

Severn Trent are rumoured to be holding out for a bid of around £5 billion, with a valuation of £23 a share.

The water company is to report full-year figures on this Thursday, with the results being used to argue for an increased offer. Severn Trent holds a strong position as one of the few remaining UK water companies after a series of acquisitions.

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