LONDON, Aug 9 (Reuters Breakingviews) - Macquarie is poking around in murky British waters. The Australian bank’s infrastructure management arm on Monday bought a majority stake in Southern Water for 1 billion pounds as part of a recapitalisation that will dilute existing owners, including UBS Asset Management and Hermes Investment Management. The company, which serves the counties of Kent, Sussex and Hampshire, has a patchy history. It recently paid a 90 million pound penalty, the sector’s biggest, for dumping sewage in rivers and off coasts. Macquarie is pledging to cut Southern’s debt, beef up governance, invest in new infrastructure and adopt a “zero tolerance” policy to pollution. Assuming Macquarie takes a 62% equity stake, its investment – including debt - values Southern at less than 110% of its regulatory capital value, a metric used to value British water companies, according to a Breakingviews calculation. Rival Pennon (PNN.L) trades at a nearly 40% premium, according to RBC analysts. Macquarie is not paying a steep price, but it probably faces a long wait for a decent return. (By Neil Unmack) On Twitter http://twitter.com/breakingviews Capital Calls - More concise insights on global finance: Delivery Hero diversifies its portfolio of rivals read more Virgin Atlantic IPO needs strong tailwind read more Citi gets better end of Aussie bank sale read more Chinese fast-fashion icon gets sunlight treatment read more Meituan’s troubles won’t end after $1 bln fine read more