Pennon Group PLC on Wednesday announced a placing and retail offer to raise up to £180 million, in connection with its newly announced takeover of Sutton & East Surrey Water PLC.

Pennon, an Exeter-based water utility company, on Wednesday acquired Sumisho Osaka Gas Water UK Ltd and certain ancillary businesses from Sumitomo Corp and Osaka Gas for £89 million. Sumisho Osaka is the holding company of Sutton & East Surrey Water, or SES Water.

Pennon said it expects the transaction, which has an enterprise value of £380 million, to be earnings accretive from the first year of full ownership and ‘generate attractive returns’.

‘SES Water is a fantastic fit for Pennon as we further expand our presence in water supply across Southern England, building on our successful similar acquisitions of Bournemouth Water and Bristol Water alongside the adoption of water supply in the Isles of Scilly,’ said Chief Executive Susan Davy.

She continued: ‘As part of the Pennon group, we will enhance SES Water’s financial resilience and better position the business to serve its customers and all stakeholders, as has proven to be the case with...Bournemouth Water and Bristol Water.’

In connection with the acquisition, Pennon announced its intention to launch an equity capital raise of up to £180 million. The fundraise is meant to ensure that the enlarged company’s pro forma leverage and capital structure remains consistent with its 55% to 65% water business gearing range.

Pennon said the fundraise will include a placing of new shares to existing and new institutional investors, along with a retail offer.

Pennon did not disclose the number of shares to be issued, and said the offer price will be disclosed at the close of the accelerated bookbuilding process. It expects admission and settlement of the new shares to take place at or before the London open on Friday.

Shares in Pennon were trading 0.9% lower at 742.50 pence each on Wednesday morning in London.

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