Canadian infrastructure investor Borealis and the Kuwait Investment Authority have formed a consortium to mount a £5.3bn bid for FTSE 100-listed water company Severn Trent, according to sources close to the situation.

Borealis - the infrastructure arm of the Ontario Municipal Employees Retirement System - and KIA have been leading an offer for Severn Trent, which supplies water to millions of people in the Midlands of England and some areas of Wales, according to three people with knowledge of the deal.