Acquisition would double Kier’s £700m portfolio, but company says it will not touch construction
The business is part of Amec’s built environment operation, which was put up for sale last month.
Its development portfolio includes mixed-use, commercial, residential, retail and leisure schemes. If Kier makes a bid and is successful, the acquisition would more than double its own portfolio, which stands at about £700m and concentrates on commercial property.
Dodds said Kier was considering the property unit but would “not touch construction”.
Amec’s built environment unit has four divisions: construction and civil engineering, facilities management, property developments and PPP.
The announcement that it was selling the division sparked a flurry of interest from rivals, private equity groups and PPP funds. However, most analysts agree that the sale of the construction and civils business will be challenging as it has been plagued by problem contracts.
Over the past two years Amec has made provisions of more than £250m, mostly as a result of construction and civils contracts. Disputes include repair work on Thelwall Viaduct, for which the government is suing Amec for £37m.
Its PPP business will be more attractive to buyers and it is understood that the Secondary Market Infrastructure Fund is interested in making an offer.
In terms of the construction business, Balfour Beatty has previously shied away from making acquisitions but is thought be in a good financial position to put in an offer.
Ray O’Rourke famously bought Laing for £1 after it got into financial difficulties, and if Amec’s construction unit is beset by liabilities he could be looking to strike a similar deal.
Europeans contractors looking to strengthen their presence in the UK have also shown interest.
Amec said it would consider selling the business in parts or as a complete unit. In 2005 it generated a profit of £14m on a turnover of £1.3bn.