Shares in utility East Surrey Holdings have rebounded following news that Terra Firma will be denied its request to pull out of the GBP453 million acquisition deal agreed earlier in the year.

Private equity outfit Terra Firma had filed an application with the UK Takeover Panel to lapse the buyout proposal. However, the Panel has told the finance company that is must go ahead with the purchase having determined that Terra’s justifications for reversing its plans were not sufficient reason to be released from the buy out agreement.

Terra had reached an agreement to buy East Surrey, which runs Northern Irish gas distribution business Phoenix Natural Gas, southern English water utility Sutton and East Surrey Water and ES Pipelines, back in April. However, concerns over possible implementation of changes to the license framework for Phoenix Natural Gas caused Terra to rethink.

As a result of the news East Surrey’s shares recovered 9%, recovering the lost value resultant from Terra’s original revelation in August that it wanted to pull out. It is reported that Terra Firma will not appeal the Takeover Panel’s decision.