INFRASTRUCTURE company Balfour Beatty has rejected a second proposal from rival Carillion to merge, citing significant risks the £3bn deal would pose to its business.
Balfour Beatty said it had rejected Carillion’s proposal on the grounds that there was no strategic logic other than to enhance the earnings of the combined group.
Balfour said two weeks ago it had broken off merger talks after Carillion insisted it cancel the planned sale of its US unit Parsons Brinckerhoff and keep it within the merged company.
The approach by Carillion in July followed a difficult 18 months for Balfour Beatty, which has issued a series of profit warnings and lost its chief executive in May. Reporting its half-year results two days early, Balfour Beatty said it was performing in line with its most recent trading update. Underlying pretax profit in the six months to June 27 fell 53 per cent to £22m, hit by a slump in its mechanical and electrical engineering division, which it had already flagged in July.