LONDON (ShareCast) - Severn Trent has rejected the latest takeover proposal from international consortium LongRiver Partners at 2,200p per share, a move which has put a potential takeover of the water group at risk.

The UK firm argues that Friday's sweetened offer - which represents a 20.5% premium to its share price the day before the initial approach was made last month - doesn't truly reflect its "significant long-term value" or future potential.

This was the second time that the group of foreign investors - comprising Canadian investment group Borealis, the Kuwait Investment Office and Universities Superannuation Scheme Limited - have raised their bid for the company and been rejected.

Despite Severn Trent's Chairman Andrew Duff saying that the company has held "private conversations" with LongRiver, Borealis released a statement on Monday morning explaining that "no member of the consortium or its advisers has met any of the directors of Severn Trent or its advisers, despite repeated requests".

Michael Rolland, the President and Chief Executive Officer of Borealis, said that the board of Severn Trent has show "no interest" in discussing an offer since the consortium submitted its first proposal on May 14th.

"In the absence of any such engagement, there will be no further proposal from the consortium and no offer for Severn Trent shareholders to consider," Rolland said.

Severn Trent has until the official 'put up or shut up' deadline of 17:00 on June 11th to complete the consortium's due diligence and recommend the offer, or LongRiver will walk away, it warned.

Severn Trent's shares have advanced strongly since the start of 2013 (up 32% year-to-date), rising nearly 14% over the past month alone in anticipation of a buy-out.

However, the stock was down 3.96% at 1,988p in early trading on Monday.

Duff said: "The Severn Trent board has carefully considered this proposal. The board unanimously believes that this [roposal is not at a level that adequately compensates our existing shareholders for selling Severn Trent's increasingly rare combination of yield, inflation - linked business model and record of operational delivery for customers," he said.

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