Partly Cloudy

Partly Cloudy

max temp: 4°C

min temp: 3°C

Search

Construction: Balfour Beatty rejects further approach over merger with Carillion

PUBLISHED: 08:57 20 August 2014

Balfour Beatty has rejected the latest merger approach from rival Carillion.

Balfour Beatty has rejected the latest merger approach from rival Carillion.

newscast

Balfour Beatty today rejected a last-ditch attempt by Carillion to keep alive the prospect of a £3billion merger, a day before the deadline for any deal expires.

Shares in Balfour Beatty fell nearly 6% in early trading after the infrastructure services company said it had considered the latest offer and consulted with major shareholders but found it failed to address key issues. Carillion shares also fell, by 2%.

The issues include disagreement over the future of Balfour’s US business Parsons Brinckerhoff, which it is trying to sell.

The firm also said the new terms were only a “small value change” compared to the previous proposal, casting doubt on Carillion’s calculations about how much the deal would be worth to Balfour investors.

“The board has unanimously concluded that the proposal is not in the best interests of its shareholders and has decided to reject the proposal,” the company said.

It said it would not be seeking an extension to the “put up or shut up” deadline under takeover rules that expires tomorrow at 5pm.

The rejection comes a day after Carillion made a sweetened offer which it indicated valued Balfour at £200million more than it had done before, urging the company to re-open talks and extend the time limit.

Chairman Philip Green highlighted “the scale of the prize for shareholders” of both companies from a merger.

Wolverhampton-based Carillion claims a merger could yield £175m a year in cost savings though Balfour has previously cast doubt on this figure.

Balfour’s rejection also called into question the way its suitor had calculated the increase in value of the all-share offer, which would also see shareholders receive a £59m dividend pay-out. It said the new proposal only amounted to a £55m improvement on the last.

Balfour, whose presence in the East of England includes bases in Ipswich, Colchester, Chelmsford and Swaffham, also again voiced concern about the business plan which it said would significantly reduce the scale of its UK construction business at a time “when it is poised to benefit from a recovery in the market”.

A key stumbling block for the merger has been Balfour’s sale of Parsons Brinckerhoff, which Carillion says should not go through in the event of a tie-up. It has offered to cover bidders’ reasonable costs of up to £10m.

But Balfour said the sale was “reaching a successful conclusion” at an attractive value which would return up to £200m to its shareholders.

It said it would “continue to be focused on delivering its standalone strategy” as set out in its interim results last week.

The results showed a 53% slump in half-year profits. Balfour is still looking for a new chief executive after the departure of Andrew McNaughton earlier this year following a profit warning.

A formation of Lynx helicopters made a stop at Wattisham Flying Station today to mark the end of the aircraft’s distinguished 40-year career with the British Army.

The family of a missing Suffolk woman have “serious concerns” about her safety, police have said.

A man and a teenager from Stowmarket have been charged with robbery along with a series of other offences.

Ipswich Town Hall is preparing for its 150th birthday with a major celebration at the end of the month.

A paranoid schizophrenic has been sectioned following a drug-induced episode involving an imitation machine gun last year.

A former solicitor who left the scene of a crash she caused while more than four times the drink-driving limit has been given a suspended prison sentence.

Organisations in a Suffolk town are teaming up to tidy litter from their streets and help preserve the environment.

Window Museum displays at Albion Wharf reflects the importance of the Ipswich barge fleet in days gone by

Today - January 16 - is Register My Appliance Day for home electricals.

Emergency services attended the scene of a car crash in Ipswich today.

Most read

Show Job Lists

Topic pages

Newsletter Sign Up

Sign up to receive our regular email newsletter
MyDate24 MyPhotos24