Private equity group EQT acquired a 42 % stake in Yorkshire Water last month, paying a steep discount that values the parent Kelda Holdings at £9.4bn, or 90 per cent of its regulatory capital value, according to three people familiar with the deal.

The price underscores the sector’s turmoil: Thames Water is fighting renationalisation, debt levels are high, and political backlash over sewage pollution has depressed valuations. Ofwat warned Yorkshire Water was “lagging behind” on pollution and forced a £600mn loan repayment, which EQT agreed to help fund.

Historically, UK water stakes traded at a 36 % premium to regulatory capital, but EQT’s purchase shows a significant discount. Still, the firm was attracted by a regulatory decision allowing bill rises of more than half by 2030, signalling continued investor interest despite the “stink” around the industry.