Right of first refusal
The Daily Mail City team explain a rare sighting of a phenomenon not normally seen in British business deals.
What is involved?
Osprey, the group angling for Anglian Water owner AWG, has secured a right of first refusal in its takeover deal.
If AWG's board is approached by a rival suitor, members have to go back to Osprey and offer the group the right to raise their offer.
If Osprey matches or exceeds the new bid, AWG's board will have to recommend shareholders accept the revised offer.
Why does it matter?
The right of first refusal is rarely seen in British deals and is imported from that most decaffeinated of countries, Canada. A previous UK example was the takeover of Lastminute.com.
It puts Osprey in a hugely powerful position, especially given that the consortium controls more than a fifth of AWG's shares. Osprey has also promised to keep the AWG board in place and has secured a chunky break fee of 1pc of the purchase price.
How strong is Osprey's position?
Prospective rival bidders - thought to include Babcock & Brown and Merrill Lynch - have a mountain to climb.
Osprey is now offering a sweetened bid price of £15.78 a share, close to the upper end of City predictions. Merrill's own water analyst, Robert Miller-Bakewell, says a bid price of up to £16 a share could be justified - but only at a stretch.
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