Balfour Beatty rejects Carillion's latest takeover bid - UPDATE

11th Aug 2014 07:40

Construction group Balfour Beatty has rebuffed another takeover proposal from rival Carillion over a row about Balfour's plan to sell its US Parsons Brinckerhoff subsidiary.Balfour, which rejected Carillion's initial approach after the latter had changed the terms to keep Parsons in the group, said Carillion had made another revised proposal which also required Balfour to keep the US engineering consultancy.But Balfour said it had rejected the latest proposal after its board had concluded that there were "a number of significant risks" of doing the revised deal, many of which could not be mitigated.Balfour said the deal could undermine the Parsons sale, which was a key strategic objective of the group, and a pledge by Carillion to cover bidders' costs if the sale was terminated may not be good enough.It also said it could not take the risk of opening its books to a rival while having serious doubts about the deal and the chances of completing it.A Balfour spokesman said: "The board has lost confidence in the likely delivery of a successful transaction and has therefore concluded that the current proposal from Carillion is not in the best interests of Balfour Beatty shareholders."With the Parsons Brinckerhoff sale process proceeding in line with the board's expectations, the board is clear its current plans to refocus and simplify the group, including the sale of Parsons Brinckerhoff, remains the most attractive option."Carillion said in a statement that it would consider its position and make a further announcement in due course, adding that the potential for any offer remained uncertain.Meanwhile, Balfour, which has struggled after profit warnings triggered the departure of its chief executive, unveiled results for the six months to 27 June which it said matched guidance in its most recent trading update.It said the Parsons sale was well under way and would result in the return to shareholders of up to £200m.Underlying half-year pre-tax profit was £22m against £47m last time and underlying earnings per share were 3.9p versus 6.6p beforehand.It said its order book had fallen 1% to £13bn from the end of the year at constant currency.It kept its interim dividend unchanged at 5.6p.Executive chairman Steve Marshall said: "Whilst our first-half performance has been significantly impacted by recent UK engineering services contract write-downs, the other parts of the group have continued to perform well."PW