ENGINEERING company Balfour Beatty has rejected Carillion’s third merger proposal, saying it failed to address the risks in the deal and only represented a small increase in value.
Carillion had gone public with its latest approach on Tuesday, valuing its rival at £2.1bn, in its bid to create a British construction giant with 80,000 staff around the world.
Both sides said they had made their decisions after consulting Balfour’s biggest shareholders. Analysts and one investor had said on Tuesday they expected Balfour to open talks with Carillion but the group said its board had unanimously rejected the offer.
It said the bid did not address its concerns over the sale of its US design and engineering business Parsons Brinckerhoff and the risks associated with reducing its UK construction business. The company added that it would not be seeking an extension to the takeover deadline of August 21, which Carillion had requested on Tuesday.
Carillion’s third approach offered Balfour shareholders a 58.3 per cent share of the combined firm and a cash dividend of 8.5 pence per share.
It said that would value Balfour at £2.1bn, compared with its previous offer of £1.9bn.
Balfour - which has endured a difficult 18 months marred by profit warnings - said it would continue to focus on delivering its standalone strategy, including the sale of Parsons Brinckerhoff. It is still searching for a new group chief executive after Andrew McNaughton’s departure in May.