Scheme of arrangement

RNS Number:5964N
Kelda Group PLC
08 February 2008


Not for release, publication or distribution, in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws or regulations of such jurisdiction.

                                                                 8 February 2008

     Recommended Proposals for the acquisition of Kelda Group plc ("Kelda")
                  by Saltaire Water Limited ("Saltaire Water")

                           Delisting of Kelda B Shares


Following an application by Kelda to the UK Listing Authority, the listing of
Kelda B Shares on the Official List was cancelled and consequently Kelda B
Shares ceased to be admitted to trading on the London Stock Exchange, both with
effect from 8.00 a.m. (London time) this morning.

An application has been made to the UK Listing Authority requesting the
cancellation of the listing of Kelda Ordinary Shares on the Official List as
well as trading of Kelda Ordinary Shares on the London Stock Exchange.
Cancellation is expected to take place at 8.00 a.m. on 12 February 2008.

Capitalised terms used in this announcement but not defined herein shall have
the meaning given to them in the Scheme Document dated 20 December 2007.

Enquiries:


Citi (Joint Financial Adviser and Corporate Broker to              020 7986 4000
Saltaire Water)
Simon Lindsay
Grant Kernaghan
David James (Corporate Broking)

Lexicon Partners (Joint Financial Adviser to Saltaire Water)       020 7653 6000
Read Gomm
Hichem Zebidi
Nico Master

HSBC (Joint Financial Adviser to Saltaire Water)                   020 7991 8888
Neil Goldie-Scot

Financial Dynamics (PR Adviser to Saltaire Water)                  020 7831 3113
Andrew Dowler
Richard Mountain
Marc Cohen

Kelda Group plc                                                    01274 600 111
Kevin Whiteman
Martin Towers

Greenhill & Co. (Joint Financial Adviser to Kelda)                 020 7198 7400
James Lupton
Richard Morse
Charles Barlow

Merrill Lynch (Joint Financial Adviser to Kelda)                   020 7628 1000
Richard Taylor
Karl Lim
Elliot Richmond

JPMorgan Cazenove (Corporate Broker to Kelda)                      020 7588 2828
John Paynter
Robert Constant

Tulchan (PR Adviser to Kelda)                                      020 7353 4200
Peter Hewer
Dominic Fry



If Kelda Shareholders have any questions relating to the Proposals, please
telephone Capita Registrars on the Shareholder helpline on 0871 664 0435 (or, if
calling from outside the UK, on [phone]) in each case between 9.00 a.m.
and 5.00 p.m. Monday to Friday (except UK public holidays).  Calls to the 0871
664 0435 number cost 10 pence per minute (including VAT) plus your service
provider's network extras. Calls to the helpline from outside the UK will be
charged at applicable international rates.  Different charges may apply to calls
from mobile telephones and calls may be recorded and randomly monitored for
security and training purposes.  Capita Registrars cannot provide advice on the
merits of the Proposals nor give any financial, legal or tax advice.



This announcement is not intended to and does not constitute an offer or
invitation to sell or purchase any securities or the solicitation of an offer to
buy any securities pursuant to the Proposals or otherwise.  The Proposals are
made solely by means of the Scheme Document, which contains the full terms and
conditions of the Proposals, including details of how to vote in respect of the
Proposals.  Shareholders are advised to read the formal documentation in
relation to the Proposals carefully.

Citi, Lexicon Partners and HSBC, which are authorised and regulated in the
United Kingdom by the Financial Services Authority, are acting exclusively for
Saltaire Water and no-one else in connection with the Proposals and will not be
responsible to anyone other than Saltaire Water for providing the protections
afforded to their respective clients nor for providing advice in relation to the
Proposals.

Greenhill & Co., Merrill Lynch and JPMorgan Cazenove, which are authorised and
regulated in the United Kingdom by the Financial Services Authority, are acting
exclusively for Kelda and no-one else in connection with the Proposals and will
not be responsible to anyone other than Kelda for providing the protections
afforded to their respective clients nor for providing advice in relation to the
Proposals.

The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the UK should inform
themselves about, and observe any applicable requirements. This announcement has
been prepared for the purposes of complying with English law and the City Code
and the information disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with the laws of
jurisdictions outside of England.

Saltaire Water may purchase Shares otherwise than under the Proposals, such as
in the open market or privately negotiated purchases.  Such purchases may be
made either directly or through a broker and such purchases shall comply with
the applicable laws of England, as well as the rules of the United Kingdom
Listing Authority, the London Stock Exchange and the City Code.  Information
about such purchases will be available from a Regulatory Information Service.

The Loan Notes to be issued in connection with the Proposals have not been, nor
will they be, registered under the US Securities Act or under the securities
laws of any jurisdiction of the United States of America and will not be listed
on any stock exchange. Further, the relevant clearances have not been, and will
not be, obtained from the securities commission of any province of Canada, no
prospectus has been lodged with, or registered by, the Australian Securities and
Investments Commission or the Japanese Ministry of Finance and the Loan Notes
have not been, and nor will they be, registered under or offered in compliance
with applicable securities laws of any state, province, territory or
jurisdiction of Canada, Australia or Japan.  Accordingly, the Loan Notes may not
(unless an exemption under relevant securities laws is applicable) be offered,
sold, resold or delivered, directly or indirectly, in or into the United States
of America, Canada, Australia or Japan or any other jurisdiction if to do so
would constitute a violation of the relevant laws of, or require registration
thereof in, such jurisdiction or to, or for the account or benefit of, a person
located in the United States of America, Canada, Australia or Japan.  Neither
the US Securities and Exchange Commission nor any US state securities commission
has approved or disapproved of the Loan Notes, or determined that this
announcement is accurate or complete.  Any representation to the contrary is a
criminal offence.

Notice to US investors in Kelda

The Proposals relate to the shares of a UK company, are subject to UK disclosure
requirements (which are different from those of the US) and are proposed to be
made by means of two schemes of arrangement provided for under English company
law.  A transaction effected by means of a scheme of arrangement is not subject
to the tender offer rules under the US Exchange Act.  Accordingly, the Proposals
are subject to the disclosure requirements and practices applicable in the UK to
schemes of arrangement which differ from the disclosure requirements of the US
tender offer rules.  Financial information included in this announcement has
been prepared, unless specifically stated otherwise, in accordance with
accounting standards applicable in the UK and thus may not be comparable to the
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in the
US.  If Saltaire Water exercises its right to implement the Proposals by way of
a takeover offer, the takeover offer will be made in compliance with applicable
US laws and regulations.

Neither the SEC nor any securities commission of any state of the United States
has (a) approved or disapproved of the Proposals; (b) passed upon the merits or
fairness of the Proposals; or (c) passed upon the adequacy or accuracy of the
disclosure in this announcement. Any representation to the contrary is a
criminal offence in the United States.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
"interested" (directly or indirectly) in one per cent. or more of any class of "
relevant securities" of Kelda, all "dealings" in any "relevant securities" of
Kelda (including by means of an option in respect of, or a derivative referenced
to, any such "relevant securities") must be publicly disclosed by no later than
3.30 p.m. (London time) on the Business Day following the date of the relevant
transaction.  This requirement will continue until the Effective Date or until
the date on which the Ordinary Scheme lapses or is otherwise withdrawn or on
which the "offer period" otherwise ends (or, if Saltaire Water elects to effect
the Ordinary Scheme Proposals by way of a takeover offer, until the date on
which any such offer for the ordinary share capital of Kelda becomes or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends).  If two or more persons act
together pursuant to an agreement or understanding, whether formal or informal,
to acquire an "interest" in "relevant securities" of Kelda, they will be deemed
to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant
securities" of Kelda by Saltaire Water or Kelda, or by any of their respective "
associates", must be disclosed by no later than 12.00 noon (London time) on the
Business Day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities.  In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website.  If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, you should consult the Panel.






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