(Balfour Beatty)

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Carillion searches for ways to keep Balfour deal alive

5 August 2014 | By David Rogers | 0 Comments

The fall out continues to land after Carillion’s failed merger with its giant rival Balfour Beatty, with reports appearing in the British press that Carillion is trying to revive the deal with the help of institutional investors with stakes in both companies. 

The breakdown in the talks were acrimonious, and the chairmen of the two companies are not thought to be on speaking terms. Carillion’s move is being seen as a way of by-passing Balfour’s senior managers and putting the case for the merger directly to its major institutional shareholders. 

The lure that Carillion is using to tempt them is the prospect of the sale of its equity investment in a number of PFI schemes. The money released would then be distributed to the shareholders.

The merger between the two companies broke down amid confusion over the fate of Parsons Brinckerhoff, the professional services firm that Balfour bought in 2000 for $626m.

The fairly advanced bidding war for this firm will add another obstacle to any resumption of talks between Carillion and Balfour. The deadline for concluding a deal, according to the UK Takeover Code, is 21 August.