LONDON: Construction firm Balfour Beatty Plc. is considering bidding for smaller rival Mowlem Plc., which has already agreed to a cash and stocks takeover by Carillion Plc. for 290 million pounds.
Balfour Beatty, which has building, engineering and rail divisions, said it is considering making an offer, but there is no certainty.
Carillion, a spin-off after the Tarmac group demerged in 1999, revealed its firm offer to Mowlem on 7 December. It constituted 82 pence in cash and 0.39 shares in the enlarged company for one Mowlem share. The company estimated that the takeover will lead to a cost savings of 15 million pounds a year by the end of 2007. The unified entity will be one of the country's largest support services and construction firms with a turnover of 4.1 billion pounds.
Mowlem has a 100 million-pound pension deficit and any suitor will be required to provide for this.
Balfour Beatty had a 37 per cent rise in profits at 67 million pounds for the half-year period ended 2 July. It was subjected to a 10 million-pound fine for the Hatfield rail disaster in autumn 2000, when it was in charge of track inspection.
The buyout is expected to help the company tap government contracts under the government policy of build and maintain infrastructure projects.
Mowlem, which constructed the former NatWest Tower in London's financial district, provides specialist rail services in Britain. It has operations in the U.S. and Canada, and a range of private finance initiative contracts, spanning health, transport, education and defence.
Posted
on : Mon, 12 Dec 2005 12:50 GMT | General News
By : Salim Patel
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