Fund considers £1bn move for Balfour Beatty’s investment arm
JOHN Laing Infrastructure Fund (JLIF) is considering a £1bn bid to acquire the investment arm of Britain’s largest construction company, Balfour Beatty, it emerged yesterday.
The offer from JLIF – one of Europe’s largest listed infrastructure funds – would be for Balfour’s portfolio of private finance initiative (PFI) contracts. The 60 PFI contracts are mostly low-risk, long-term maintenance deals that provide a consistent flow of profits – £132m last year. The contracts include agreements to service roads, hospitals and student accommodation, and to upgrade and maintain around 20 military housing projects in the US.
In the summer, following Carillion’s failed takeover attempt, Balfour revalued its PFI contracts, pricing them at £1.1bn – 46 per cent more than previously thought. The beleaguered construction firm has since appointed Goldman Sachs to offload assets and advise on alternative strategies.
JLIF listed on the stock market in 2010 after it took on a portfolio of PFI contracts from the Henderson Equity Partners-owned developer John Laing. JLIF did not comment.