Balfour Beatty used to be my pin-up boys, so what has gone wrong?
Balfour Beatty used to be my pin-up boys: all things to all men, with a sure touch. And they made money in America (which is almost unique for a British contractor).
So what went wrong?
Perhaps it was too many UK acquisitions? An infatuation with PPP/PFI? Or promoting the CFO to CEO?
And, what’s the common denominator in all three of the above? Management.
I still miss Mike Welton, who retired as CEO at the end of 2004. He was the real deal and was succeeded by group CFO Ian Tyler on 1 January 2005.
Make no mistake, either, this is not a proposed merger - it is a takeover
From then, through 2007 - and even into 2008 - it was easy to make money; and Balfour Beatty’s share price flirted with £5 in December 2007.
But then, as Lehman Brothers went bust in October 2008 and we were enveloped by the global financial crisis - and its aftermath - the men and the boys were uncovered.
In my view, Ian Tyler is one of the latter and he resigned in January 2013 followed quickly by his successor, Andrew McNaughton (another boy or just unlucky?), in May this year.
Enter Carillion, the serial acquirer, noted opportunist, and seamless PR machine (for example, how much shareholder value did the acquisitions of Mowlem and Alfred McAlpine add?).
Make no mistake, either, this is not a proposed merger - it is a takeover.
And why not? Balfour Beatty is even contemplating throwing the baby out with the bath water as it proposes to sell Parsons Brinckerhoff in order to survive.
According to Bloomberg the 52-week high in Balfour Beatty’s share price is 322.2 pence and its low 193.80.
At the close on 28 July it was a-possible-acquisition-assisted 253 pence.
Some companies deserved to be taken over. Good night nurse.
Tony Williams is founder and chief executive of Building Value