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.

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.

KKR & Co. Inc. (NYSE:KKR) has backed out of the Thames Water equity raising, the U.K.-based utility company confirmed on Tuesday. The private equity giant mentioned its inability to proceed further, effectively ending its status as the preferred partner.