LONDON (ShareCast) - The short back-and-forth battle between Severn Trent and LongRiver Partners has come to an abrupt end, with the consortium announcing the withdrawal of its bidding interest for the water group late on Tuesday night.

The result was a sharp drop in Severn Trent's share price on Wednesday morning, down as much as 8.0% early on.

The stock surged to multi-year highs last month after the consortium - comprising Canadian investment group Borealis, the Kuwait Investment Office and Universities Superannuation Scheme Limited - first announced its intention to take over the company, the latest UK utility group to attract the attention of foreign investors.

However, after Severn Trent repeatedly rejected increased offers from LongRiver - saying that they did not reflect its "significant long-term value" or future potential - the consortium said it would walk away.

The latest offer, made on June 7th at a price of 2,200p per share, valued Severn Trent at around £5.3bn. This was up from the initial bid of 2,050p a share.

LongRiver warned on Monday that it would not put forward a further proposal for Severn Trent in the absence of "meaningful engagement" with the utility group's board.

"No meaningful engagement between the parties has occurred," Borealis said in a statement after the market-close on Tuesday.

In response, Severn Trent said that it had always been open to discussions with LongRiver in the event that it put forward a proposal it thought was good enough.

Severn Trent Chairman Andrew Duff said: "Throughout the course of this process we and our advisers have held talks with, and given careful consideration to every proposal made by the consortium. We have consistently made clear to the consortium our belief that Severn Trent has a value to our shareholders above the level it indicated it was willing to pay.

"This difference in value has been at the heart of this process and the consortium has either not been able, or willing, to bridge that value gap."

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