Balfour Beatty share price leaps as Carillion raises merger offer
Carillion has upped its offer for Balfour Beatty for a third time as the deadline looms for a potential mega-merger between the two construction firms.
The renewed offer values Balfour Beatty at more than £2bn and offers shareholders a 58.27 per cent share in the new company, up on the previous offer of 56.5 per cent.
The offer also represents a premium of 36 per cent on the value of shares the month prior to the news of the merger talks.
Balfour Beatty's share price leapt nearly four per cent in afternoon trading and Carillion shares were up slightly. Shareholders were presumably encouraged further when Balfour, which has until now been firmly against a deal, said it would "consider" it.
Carillion said it “continues to believe in the powerful strategic logic of a merger with Balfour Beatty” ahead of the 5pm Thursday deadline under UK takeover rules.
This could mean talks resume between the two companies, which would be likely to result in an extension to the deadline at the request of Balfour Beatty. Carillion said it expects to make a firm offer within four weeks, after due diligence, if Balfour Beatty choose to re-engage in the talks.
Chairman Philip Green said:
Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the Board of Carillion remains committed to moving forward in a constructive and collaborative way with the Board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies.
One of the sticking points in the negotiations so far has been Balfour Beatty's US engineering firm, Parsons Brinckerhoff. The company is said to be in advanced negotiations to sell Parsons to Canadian firm WSP Global for around $1.2bn (£717m), although Carillion wants Balfour to keep hold of the firm.
Last week Balfour disputed figures by Carillion suggesting the two could make cost savings of £175m from the deal.