BICC announced on Wednesday that it had decided to exit the cable market to focus its activities on the construction sector.
BICC chief executive Alan Jones said the sale would enable BICC to focus on growth areas within Balfour Beatty such as rail engineering and asset management.
Analyst Leslie Kent of Seymour Pierce said: "This could really put the cat among the pigeons. Quite clearly, it's killed or be killed for Balfour Beatty. To stay in the UK, they need bolt-ons, and if they want to be a European company, they need to act because they are still the size that a European company that wants to get into the UK might find attractive." Kent added: "The sale puts Balfour Beatty in a very strong position. With no real debt, it can borrow, but it depends on how aggressive the management is.
"Everyone is talking about consolidation in the industry and with these funds Balfour Beatty has the fire power to do something." Possible takeover targets include the soon-to-be-demerged Tarmac, whose success in winning private finance initiative work could prove an inducement to Balfour Beatty.
Bovis, due to be floated next year by parent P&O with a £250m-350m price tag, could also be an attractive prospect and would complement Balfour's strong civils base.
Kent said Balfour Beatty could also look to join the European superleague by buying into a European operation.
"The liberation of Balfour Beatty should make events in the construction sector very interesting in both the UK and Europe over the next six months," he said.
The decision will have to be approved by BICC shareholders at an extraordinary general meeting that will take place in London in May.
The decision to dispose of its cables interests comes two weeks after BICC rejected a £379m takeover bid by industrial conglomerate Wassall, which owns a 9.3% stake in the group.
City sources said Wassall would probably sell its share in BICC as a result of the sale: "They won't be chuffed. Their bid was for the whole company. It's difficult to see their interest in BICC now." A Wassall spokesman said: "We're considering the implications, but the disposal does not look like a good deal for BICC shareholders." A spokesman for BICC said the group was considering changing its name to Balfour Beatty.
Balfour Beatty's engineering, construction and maintenance division had a turnover of about £2.18bn in 1998, returning a pre-tax profit of £69m on margins of 3.8%.
