Gleeson spurns takeover advance

Greg Wright Deputy Business Editor

TAKEOVER activity in the construction sector intensified yesterday when MJ Gleeson revealed it had spurned the advances of an investment vehicle.

Gleeson, which has been heavily involved in Sheffield’s regeneration, said the outline proposal was worth 177.5m and would have been paid in cash and shares.

Although the identity of the potential bidder was kept secret, Gleeson said it was listed on the Alternative Investment Market and had no active employees or connection with the building industry.

The bid proposal would have seen chairman Dermot Gleeson and chief executive Terry Massingham remain with the group along with its new finance director and four non-executives.

Gleeson shareholders would have ended up owning 97 per cent of the combined group’s share capital.

The statement was issued in response to a Sunday Times report of a mystery bid approach and follows a hectic round of takeover activity in the sector.

In the past two months, engineering and construction firm Mowlem has attracted bid interest from Carillion and Balfour Beatty, Persimmon has agreed the acquisition of Westbury and contractor John Laing rejected a takeover approach.

Gleeson has a homes division, a construction services division and a property investment arm that buys and sells office, retail and industrial property.

As well as its head office in North Cheam, Surrey, the company has regional offices in Sheffield and Haydock on the outskirts of Manchester.

Shares in Gleeson rose yesterday to continue their recovery from an eight-month low in December.

Gleeson fell into the red last year by 13.2m after experiencing problems at its building division, which was sold to management in July.

Margins in the division were considered by Gleeson to be too low to justify the risks in contractual work.

Over the years, this division had worked on the construction of many well-known buildings including the Lloyds of London building, the Crucible Theatre in Sheffield and Crystal Palace Athletics Stadium in South London.