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14.08.14

Carillion doesn’t rule out third Balfour Beatty bid

Carillion has not ruled out the possibility of making a third bid to merge with Balfour Beatty, despite talks breaking down earlier this week.

In a stock exchange statement, it was stated that since Monday 11 August – the day Balfour Beatty rejected a revised merger proposal – Carillion has held meetings with a number of Balfour Beatty’s major shareholders.

It added that if a potential merger should go ahead, an extra cash dividend of 8.5p per share has been offered to Balfour Beatty shareholders.

Carillion, which has just announced a 5% rise in pre-tax profits for the six months to the end of June to £67.5m compared with £64.2m a year earlier, added that it continues to “believe in the powerful strategic logic and financial benefits of a merger with Balfour Beatty and is therefore continuing to consider its position”.

It added that as a direct result of a merger the two companies could save £1.5bn and the cost-base of the combined group could be reduced by at least £175m per annum by the end of 2016.

However, one of the major roadblocks had been with regards to the sale of Parsons Brinkerhoff. 

Even in the latest announcement, Carillion has not altered it stance stating that based on initial discussions with banks ‘and assuming the retention of Parsons Brinckerhoff’, the Board of Carillion is highly confident that £3bn of available funding would be accessible to the combined group..

The announcement added, though, that “there can be no certainty that any offer will be made by Carillion or as to the terms on which any such offer might be made”.

Photo shows Balfour Beatty/Carillion JV contractors on-site at Shoreditch during East London Line works in 2008. Copyright Adambro (Creative Commons)

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