Committee publication · Correspondence · 15 July 2025
Correspondence from Thames Water regarding KKR board minutes dated 10 July 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
Thames Water's Chairman Sir Adrian Montague writes to the EFRA Committee chair detailing the board's decision-making process regarding the KKR equity proposal and subsequent creditor-led alternative. He explains the board committee's role in evaluating bidders, KKR's withdrawal on 2 June 2025, and the subsequent pivot to the senior creditors' proposal. The letter declines to disclose board minutes, citing market sensitivity and confidentiality concerns that could undermine the transaction.
Key findings
- An independent board committee, chaired by Sir Adrian Montague and comprising non-executive directors, evaluated equity proposals from February 2025 onwards with support from Rothschilds advisors and regulatory feedback from Ofwat.
- The board selected KKR as preferred partner on an exclusive basis in late March 2025, alongside a senior creditor alternative proposal to maintain competitive tension.
- KKR withdrew on 2 June 2025 after concerns emerged about obtaining final investment committee approval, despite government intervention.
- Following KKR's withdrawal, the board pivoted to the creditor-led proposal, deemed 'fully-funded, highly developed and credible' by both the committee and senior creditors holding over £9 billion Class A debt.
- Thames Water declined to disclose board minutes, citing duties to stakeholders and risks that disclosure of market-sensitive information could undermine the ongoing transaction negotiations.
Tone
ProceduralTopics
Key actors
Sir Adrian Montague, Rt Hon Alistair Carmichael MP, Thames Water, KKR, Ofwat, Rothschilds, Class A Ad Hoc Group, Lord Redesdale
Notable line
“… we are very concerned that disclosure of the board minutes, or other market sensitive or confidential information …”
Key Quotes
“Thames Water established a committee of the Board to consider the equity proposals. I am chair of the committee, and the other members are also independent non- executive directors, enabling independent review of the proposals …”
“On 29 May 2025, however, it emerged that KKR had concerns in relation to obtaining final investment committee approval to submit a proposal to the Company and Ofwat.”
“The committee noted that the creditors had produced a fully-funded, highly developed and credible proposal and agreed that it would be in the best interests of the Company to pursue the creditor- led proposal.”
“… we are very concerned that disclosure of the board minutes, or other market sensitive or confidential information …”
“The Board has statutory duties to act in the best interests of its stakeholders.”
Source · parliament.uk record ↗