Carillion has made an improved merger offer to Balfour Beatty that would see the company retain a 58.268% share of any combined business.
This is up from the original offer of 56.5% that was recently rejected by Balfour.
Carillion hopes that, on the basis of these improved terms, the board of Balfour Beatty will now re-engage in discussions and extend Thursday’s (21 August 2014) deadline for any takeover.
The improved offer would see Balfour shareholders receive 8.5 pence per share (£59 million in total). This values Balfour Beatty at £2,086 million.
In a statement Carillion said: “The board of Carillion continues to believe in the powerful strategic logic of a merger with Balfour Beatty and that, as a direct result of the merger, the cost-base of the combined group could be reduced by at least £175 million per annum by the end of 2016.”
The statement added: “Carillion has repeated to Balfour Beatty that it is willing to allow it to continue with its Parsons Brinckerhoff auction process, and to enter into a contract for a sale of Parsons Brinckerhoff subject to shareholder approval. However, should the merger proceed, Carillion would expect the disposal of Parsons Brinckerhoff not to be completed.
“Carillion is willing to reimburse the remaining Parsons Brinckerhoff bidders’ reasonable costs (up to £10 million in aggregate) from the date that discussions with Balfour Beatty resume, in the event that the merger goes ahead and Parsons Brinckerhoff is not sold.”
Philip Green, chairman of Carillion, said: “Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the board of Carillion remains committed to moving forward in a constructive and collaborative way with the board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies.”
