Balfour Beatty squeezed out as new offer recommended by board.
Carillion has upped its bid for rival Mowlem £22 to £313m in an effort to see off a potential competitor Balfour Beatty for making an offer. Balfour said it was considering bidding earlier this week, but has yet to name a price. Philip Rogerson, the chairman of Carillion, said: “I would hesitate to call it a knockout bid but we believe this is a very good offer which has strong shareholder support.”
Mowlem chairman Joe Darby added: “I am very pleased to be able to recommend this improved final offer from Carillion. I firmly believe that the combination of Mowlem and Carillion will create a strong company and that Mowlem shareholders will derive significant value.”
If the merger goes ahead it will create one of the UK’s biggest construction and support services groups, with an annual turnover of around £4.1bn. Carillion expects to make cost savings of approximately £15m a year from the deal by closing on of the HQs and rationalising the regional property portfolio. Several hundred jobs could also be lost.
In a separate statement, Carillion announced that it expects to reach financial close on a £1.1bn PPP hospital development in Portsmouth later today. In a 50/50 joint venture with the Royal Bank of Scotland, Carillion will finance, build and provide FM and maintenance services for a 1200-bed acute hospital as part of the Queen Alexandra PPP project for the Portsmouth Hospitals NHS Trust. The contract is for 35 years.