Contractor makes announcement following rejection by Mouchel of a total of four Costain bids

Costain has announced that it has “no intention to make an offer for Mouchel” after the consultant rebuffed a total of four offers from the contractor.

The last of Costain’s offers was priced at 155p a share, mainly in the form of Costain shares. In a statement on Tuesday 29 March, to accompany its six-month results, Mouchel shunned Costain’s most recent offer, along with a 135p per share rival offer by Interserve in cash and shares.

Following Mouchel’s response Costain embarked on a one week period of further due diligence to reconfirm the terms of its revised proposal.

However, regulations mean that the contractor could still make another offer for Mouchel on a number of grounds, including if material circumstances change.

Costain initially approached Mouchel in a bid to broaden its spectrum of activity beyond construction work to include front-end design and consultancy, as well as maintenance work.

Analysts have said that they expect Costain to pursue this growth strategy, known as “Choosing Costain”, via a series of bolt-ons of smaller, private consultancies.