French giant understood to be in talks to acquire Warings, a medium-sized firm in Portsmouth
French construction group Bouygues is understood to be targeting Warings, a contractor in Portsmouth, as its first major UK purchase, after it emerged that the pair are in talks to establish at least a strategic alliance.
A source close to Warings said: “The firm been exploring alliances with bigger people, so it can get some crumbs off the big boys on the top table. So it has spoken to Bouygues.”
An acquisition would fit in with Bouygues’ expansion plans and would be in line with what is expected to be a growing trend of European contractors expanding into Britain.
Last week, Pascal Minault, managing director of Bouygues UK, said he hoped to buy a regional contractor with a turnover of between £100m and £200m. Warings had a turnover of £127m in its last full year results to April 2006.
Although turnover rose £18m that year, results were disappointing. Pre-tax profit fell from £2.3m to £1.5m and 20 staff were made redundant after problems on two contracts.
It has been a rough couple of years for Warings. The owners are looking to cash in
Source close to both firms
A second source, who is close to both companies, said: “It has been a rough couple of years for the owners. People think that they are looking at cashing in.”
A leading regional contractor also confirmed that the management of Warings is in the market to sell. The contractor was asked whether it would be interested in buying the firm about four months ago.
It is thought that Bouygues is interested in developing the relationship that Warings has with the British Airports Authority (BAA). Warings has completed work for BAA at Heathrow, Gatwick and Southampton and has tried to get on to its commodities framework, which covers projects valued at between £3m and £15m.
Bouygues is keen to establish a range of regional spokes with the hub in London, in much the same way that the company grew out of Paris in the 20th century.
Len Salter, chief executive of Warings, declined to comment, as did Bouygues.