Third time not lucky: Balfour Beatty shares open 5.7% lower as it rejects another Carillion merger offer
Balfour Beatty has rejected a third merger offer from Carillion, as they remain unwilling to end the planned sale of US design consultancy Parsons Brinkerhoff.
Construction services group Carillion yesterday offered a sweetened merger proposal to Balfour in the hope of finally coming to an agreement that has failed to materialise since Carillion first approached their construction rival on 27 May.
Carillion's improved offer valued Balfour at £2.1bn and offered shareholders a 58.27 per cent share in the new company, representing a £200m upgrade and an increase on the previous offer of 56.5 per cent. However, Balfour's retention of Parsons Brinkerhoff remains a condition of the deal.
Balfour said it will not be extending its deadline of 5pm Thursday for any final offer from Carillion. The company is refusing to terminate the sale of Parsons to Canadian firm WSP global for around $1.2bn (£717m) because it is close to "reaching a successful conclusion".
The decision provoked the ire of shareholders: shares opened at £13.50, 5.7% lower than last night's closing price.
A statement from Balfour Beatty read:
The Board has unanimously concluded that the proposal is not in the best interests of its shareholders and has decided to reject the proposal.
Therefore the Board will not be seeking an extension to the PUSU ("Put Up or Shut Up") deadline of 5pm on 21 August 2014.
Yesterday Carillion said it “continues to believe in the powerful strategic logic of a merger with Balfour Beatty".