Shares had risen 8% in wake of contractor’s purchase of infrastructure group Parsons Brinckerhoff

Shares in Balfour Beatty fell back more than 3% in early trading as the City digested the contractors £380m deal to acquire US infrastructure group Parsons Brinckerhoff.

The deal, Balfour’s biggest purchase, had pushed Balfour shares up almost 8%, when it was revealed on Thursday as the City welcomed the acquisition.

Kevin Cammack, analyst at Cenkos Securities, said: “Strategicially the deal makes a lot of sense. But Balfour is paying a pretty full price and there is always a risk when you buy what is essentially an employee owned company. A lot of Parsons staff stand to make quite a bit of money from the deal and the question is how do you lock those employees in?”

Ian Tyler, Balfour Beatty’s chief executive, said a number of key Parsons staff would be tied into the business, but added the key to retaining staff was to ensure they remained enthused about the company’s future.

Balfour earlier revealed it intended to fund the purchase through a £353m rights offer, Balfour Beatty’s second cash call in two years.

Balfour will offer existing shareholders three shares at 180 pence each for every seven already held in the rights offer, which is fully underwritten.

Cammack said: “I think investors will buy into the vision of what Balfour is trying to do. It is another cash call and the business has been expanding quite rapidly in recent years into the overseas market, but the nature of the business Balfour is buying here, which is entirely fee based, is less risky than Balfour’s other activities and the US has ridden the worst of the recession.”

The deal propels Balfour Beatty into a global leader in infrastructure services and leaves it well placed to take advantage of increased infrastructure spending in a range of markets, including the Middle East, Australia, the US and Asia.

Parsons had an adjusted operating profit before one time and employee stock items of $107m (£65m) and turnover of $2.34bn (£1.4bn) in the year through October 2008.

The deal still has to be formally approved by shareholders of both companies.