Balfour Beatty share price jumps as Carillion raises merger bid
Carillion, the construction services group, yesterday sweetened its takeover offer for Balfour Beatty in the hope it would break through the wall of resistance from its rival and convince an intransigent chairman and his team of advisers to return to the negotiating table.
The raised bid, which values Balfour Beatty at £2.1bn, comes as the clock rapidly ticks down to tomorrow’s put-up or shut-up deadline.
The offer set off a frenzy of activity late into the night as Balfour held discussions with shareholders (some of whom are on holiday) to consider whether to rejoin negotiations or slam the door on Carillion for good, with a possible announcement as early as today.
With tomorrow’s 5pm cut-off tomorrow, Carillion called on Balfour to approach the regulatory Panel on Takeovers and Mergers and request a deadline extension to avoid the clock running down on potential negotiations.
The sweetened bid from Carillion to entice Balfour shareholders offered 58.27 per cent of a new merged company from a deal. It is believed Carillion may potentially have support from up to 30 per cent of shareholders for its new offer.
Some close to the deal last night said that Anthony Gutman, the Goldman Sachs banker adviser acting for Balfour, appeared to be faring well, having prised a higher price from Carillion. And he has done it despite Balfour not having a chief executive and hurting from three profit warnings.
The improved bid represents a £200m upgrade on the near-£1.9bn valuation arising from Carillion’s previous offer of 56.5 per cent – matching the £200m that Balfour Beatty recently said it would return to shareholders if it proceeded with a planned sale of its US arm, Parsons Brinckerhoff.
Carillion, who won the recent contract to extend Liverpool FC’s Anfield home (stadium gates, pictured), first approached Balfour on 27 May, but Balfour’s planned sale of Parsons produced a public falling out between the two companies late last month.
Carillion made the retention of Parsons a condition of a deal, with relations acrimonious since.
Balfour shares rose sharply yesterday, closing up 3.23 per cent.