Developer sets up in Prague and Toronto as deal with fund manager Henderson moves closer

John Laing plans to capture a bigger slice of the international PPP market with the launch of offices in the Czech Republic and Canada.

The new bases in Prague and Toronto are the first overseas offices that Laing has opened. Derek Potts, managing director of John Laing Infrastructure, which is responsible for international operations, said they would help Laing expand its international reach.

He said: “Europe and North America are where we see the most potential. Both offices will be supported by our London operation but run by experienced people from those areas.”

Potts said Laing had also looked at the Middle East but had no plans yet to enter that market.

“There has to be a strong business case for targeting a new market. It should be somewhere we can see a strong pipeline of deals coming through and where there is a strong local partner we can work with.”

At the moment Laing has four PPP investments in Europe, two in Finland, one in Norway and one in Poland. In America, it is bidding for the Dulles toll road near Washington DC.

Potts said the Prague and Toronto offices would begin with three or four staff in each, but would have the potential to expand.

In the Czech Republic and neighbour Slovakia, Laing will target mainly infrastructure work, whereas in Canada it is expecting the healthcare sector to provide the bulk of deals.

The expansion of Laing will probably intensify if fund manager Henderson completes its bid for the developer. As Building went to press, Henderson was the only company vying for Laing after rival bidder Allianz pulled out last week. Henderson’s offer of 405p a share values Laing at more than £1bn.

In Henderson’s circular setting out the offer, Laing said Henderson’s ownership would give it access to cheaper capital, and that this would allow it to expand more quickly.

The international drive follows a restructuring by Laing in which all its overseas activities were brought under one division.

Building can also reveal that Henderson is no longer considering making a bid for the Secondary Market Infrastructure Fund (SMIF), the largest PFI investor in Europe.

Reports have suggested that Henderson and Prudential made a five-strong shortlist to snap up SMIF, but a source close to the bidding war said both were among the 20 dropped at the longlist stage.

Private equity house 3i, Australian bank Macquarie and HSBC Infrastructure Fund Management are on the shortlist. The other two are understood to be pension funds, one of which is based in Canada.

Bids for the £700m-plus fund are expected in early December. SMIF, which is owned by a consortium led by private equity outfit Star Capital, hopes to conclude a deal early next year.

SMIF’s assets include large chunks of Jarvis’ old PFI portfolio and GCHQ in Cheltenham.

Henderson declined to comment.

How the struggle for Laing developed

14 Sept John Laing confirms that it has received a proposal after its share price rises
19 Sept Henderson and Laing reveal that they have agreed on a deal of 355p a share, valuing Laing at £889m
27 Oct Allianz puts in an offer of 385p a share, which is recommended by the Laing board
10 Nov Henderson retaliates with an offer of 405p a share valuing Laing at more than £1bn
13 Nov Laing recommends Henderson’s second offer
17 Nov Allianz withdraws its bid for Laing