KKR & Co. withdrew its bid to invest £4 billion ($5.4 billion) in Thames Water when the US infrastructure giant realized there was little upside to a deal, according to people familiar with the deliberations.

Thames Water suffered a major setback in its fight to avoid nationalisation on Tuesday as it said U.S. private equity firm KKR had pulled out of a multi-billion pound rescue plan.

The water company said the decision not to proceed with the equity raise created uncertainty around its plan to stay afloat, raising the prospect of nationalization.