LONDON (Reuters) - Dee Valley (>> Dee Valley Group plc), a British regional water group at the centre of a takeover battle, switched its recommendation back to Severn Trent on Thursday after the bigger group again trumped investment fund Ancala's offer.

Ancala agreed to buy Dee Valley last month, but was outbid by Severn Trent (>> Severn Trent Plc) with a 1,705 pence-a-share offer. The investment group came back with a bid at 1,706 pence, but was trumped again by Severn Trent with a 1,825 pence a share offer after the market closed on Wednesday.

Severn Trent's latest approach values Dee Valley, which provides water to an area in northern England and Wales, at 84 million pounds.

"The Dee Valley Board considers that the revised acquisition represents a superior offer in terms of financial value (...) as compared with the revised Ancala proposal," the company said in a statement on Thursday.

(Reporting by Paul Sandle; editing by Sarah Young)

Stocks treated in this article : Dee Valley Group plc, Severn Trent Plc