In an exclusive interview with Building, Sir Frank admitted that uncertainty about the long-term fate of an independent Bovis was the reason behind the decision to abandon its proposed stock market flotation.
Sir Frank said: "Flotation at a time when the construction sector is 14% down [the overall market value of the construction sector has fallen 14% since September] means Bovis would fetch a small cap price. Our competitors know our value better than the City, and several of our friendly competitors could acquire parts. We would have ended up with them on the board, and that was a concern."
He added: "The deal is the very, very best that could happen. In a 10-year span I couldn't see Bovis remaining independent and couldn't see any other company that would share our culture. The nearer we got to flotation, the more I became concerned. We want to be masters of our own destiny. Lend Lease gives us that; floating didn't."
A number of construction companies were understood to have expressed an interest in buying Bovis, including overseas giants Skanska and Hochtief. Sir Frank declined to comment on earlier bids but said that none of Lend Lease's potential rivals shared the Bovis culture of partnering and a non-adversarial approach to business.
What will clients make of the new parent?
Sir Frank shrugged off suggestions that ownership by a large ambitious developer would result in Bovis' clients looking elsewhere for their construction needs. He pointed out that while P&O owned Bovis it also owned and operated a property and development arm.
He said: "Were they [clients] not worried about it before? A client wants the best constructor. If they think we are the best, the ownership shouldn't worry them. The developers I spoke to didn't see a conflict of interest – they have asked us to introduce them to Lend Lease."
He added: "Lend Lease can only give 5-8% of what we are doing. They will want to help us grow to get a return on the investment, which is a substantial one, and which we can only make pay by working for many, many clients.
We want to be masters of our own destiny. Lend Lease gives us that; floating didn’t
Sir Frank Lampl, Chairman, Bovis
"There is no developer in the world that can spend £5bn in a year and that is what we are doing in construction. Lend Lease didn't acquire us for its own work, it did it to provide a service for clients worldwide, a complete life-cycle development including finance."
However, Sir Frank added that he had contacted several of Bovis' regular clients and offered his personal assurances that Bovis teams would stay with them. He insisted that no one he had spoken to had expressed reservations about engaging the company in the future.
A suitable balance sheet for megaprojects
Sir Frank said the financial backing of Lend Lease would also give Bovis extra clout when bidding for private finance initiative schemes and in the build, operate and transfer market in the Far East.
He said: "We have been shortlisted for a BOT scheme in Beijing worth $300m (£182m) with Thames Water. If we go out of P&O, our balance sheet isn't too wonderful, and for a $300m scheme someone might say 'Isn't it a little too big for it financially?' With Lend Lease, we won't have that problem."
Sir Frank drew a parallel between this week's successful deal and last year's failed attempt to merge Bovis with WS Atkins to illustrate the point. "The merger with Atkins would have created a company with a very weak balance sheet. With Lend Lease, we have what we wanted and a hell of a balance sheet. Lend Lease does finance and we do constructing," he said.
Sir Frank added that he had no plans to retire and would remain with Bovis for at least a couple of years. "I'll stay for as long as Bovis will have me, or as long as I enjoy it. It will be business as usual," he said.
