Ballast Nedam, Ballast's Dutch owner, announced on Tuesday that it is leaving the UK and plans to sell its subsidiary after several years of disappointing results.
But the announcement was surrounded by confusion, with contradictory claims from Ballast Nedam and its UK subsidiary (see extracts from press releases, right).
A Ballast Nedam spokesperson said: "It is obvious that profitability has not been good enough. We are selling but still have to decide what to do." He said more details would be released next Friday when Ballast Nedam posts its half-year results.
Industry sources said Hochtief was looking to expand in the UK. Hochtief owns 48% of Ballast Nedam and there is speculation that Hochtief may acquire the whole group.
A Hochtief spokesperson said the firm was unable to comment until Ballast Nedham's half-year results were published next Friday as it owns shares in the company.
Ballast Nedam's announcement that is abandoning its "two home market" of the Netherlands and the UK caps a wretched year for its UK arm. It lost £20m last year, which prompted a major restructuring resulting in the loss of 250 jobs. Ballast, which has a turnover of £343m, now employs 1200 people.
UK contracting rivals said Hochtief chief executive Hans-Pieter Keitel, who is on the supervisory board of Ballast Nedam, had wanted to establish a bigger UK presence for some time. One said: "Hochtief has been doing some joint ventures but is using its balance sheet and technical expertise rather than a lot of resources."
Hochtief's UK business consists of a small operation in the south and a Channel Tunnel Rail Link contract in Kent. It ruled out the purchase of a contractor to develop its UK presence earlier this year but sources said the Ballast opportunity was too good to pass up.
Ballast's southern divisions have been losing money for several years but its Midlands, northern and PFI operations are profitable.
Jarvis is tipped to be interested in Ballast's education PFI business. Other contractors, such as ROK and YJL, may also be interested in parts of the firm.