Kelda Group, the owner of Yorkshire Water, said yesterday that it had agreed to be bought for £3 billion by a consortium including HSBC, Prudential and Citigroup.

Kelda, a supplier of water and sewage services to 4.7 million people and 140,000 businesses in Northern cities such as Leeds and Sheffield, said shareholders would receive 1,090p a share from the consortium, called Saltaire Water. It includes HSBC, Citigroup Alternative Investments, GIC Special Investments – the private equity arm of the government of Singapore – and Infracapital Partners, an infrastructure fund controlled by Prudential.

Shareholders will also receive a 10.65p a share dividend, taking the total to 1,100.65p. The deal values Kelda at £3.03 billion, representing a 25 per cent premium over its regulatory asset value.

Kevin Whiteman, Kelda’s chief executive, said that the “fair and reasonable” offer represented a “great deal for our shareholders”. He added: “This is a quality consortium buying a quality business.”

Mr Whiteman said that the deal included just over £2 billion of debt, giving Kelda an enterprise value of about £5.5 billion.

He declined to say whether any other bids had been submitted besides Saltaire’s, which was first announced last Thursday.

The Saltaire consortium yesterday sought to head off the possibility of a takeover battle by buying up around 20 per cent of the shares in Kelda at the offer price – a step that would make it extremely difficult for a rival to step in.

Saltaire is expected to use Kelda, which employs 4,000 staff, as a platform for further acquisitions in the UK and European utilities sector.

Juan Bejar Ochoa, a representative of the consortium, said the acquisition offered “the potential to deliver further growth and investment opportunities”.

Infrastructure funds have been eager to buy UK water companies recently, attracted by their stable, long-term cashflows and low risks.

In October, a consortium comprising Australia’s Challenger Infrastructure Fund and JPMorgan Asset Management paid £4.2 billion for Southern Water. Last year, the Australian bank Macquarie paid £8 billion for Thames Water.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax