Balfour Beatty share price: Carillion sweetens takeover offer

on Aug 14, 2014
Updated: Oct 21, 2019
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iNVEZZ.com, Thursday, August 14: Carillion (LON:CLLN) has announced that it offered Balfour Beatty’s (LON:BBY) shareholders an additional cash dividend of 8.5 pence per share, in its attempt to push through a merger.

The news comes as Carillion today released its half-year results, revealing a five percent year-on-year rise in pre-tax profit to £67.5 million.
As of 11:56 BST, Balfour Beatty’s shares are currently trading about one percent up at 238.90p, while Carillion’s share price has climbed 6.48 percent to 340.75p.
**Additional dividend for Balfour Beatty shareholders**

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Carillion revealed in a statement today that the company had offered Balfour Beatty shareholders a further dividend of 8.5 pence per share in addition to the final 2014 dividend they would be entitled to receive as shareholders in the enlarged group.
A potential tie-up would allow both companies to reduce the cost base of the combined group by at least £175 million a year by the end of 2016. The cost savings would represent a capitalised value of over £1.5 billion.

The proposal was made after Carillion held meetings with Balfour Beatty’s major shareholders, following the rejection of the previous offers.
On Monday, Balfour Beatty declined a second merger offer from Carillion Plc, saying that the deal could create significant risks for shareholders, mainly related to the US design consultancy Parsons Brinckerhoff sales process. ()

In a statement today, Balfour Beatty commented that the new proposal did not address the “significant risks” set out in its previous announcement earlier this week.


“The Board is confident that pursuing its strong independent strategy based around a recovering UK business, growing US market and significant investments business is more attractive than a merger on the terms proposed by Carillion with its associated execution risks and potential value loss from a terminated Parsons Brinckerhoff sale,“ Balfour Beatty commented.
Under UK takeover panel rules Carillion has until the 21 August to make a final offer.

**Carillion posts H1 results**
In a separate statement today, Carillion posted its interim results for the six-months ended June 30, 2014, reporting a three percent increase in underlying pre-tax profit to £75.9 million compared to £73.5 million a year ago. Profit before tax rose five percent to £67.5 million, while underlying earnings per share came in at 14.7p. Despite a five percent drop in half-year revenue to £1.871 billion, the full-year targets for revenue growth remained unchanged.
Philip Green, Carillion chairman, said: “Carillion continues to perform in line with the Board’s expectations, reflecting the benefits of the early actions we took in response to the economic downturn, notably the planned rescaling of our UK construction business, together with our continuing strong work-winning performance.”
**As of 11:57 BST, buy Balfour Beatty’s shares at 239.00p.**
**As of 11:57 BST, sell Balfour Beatty’s shares at 238.50p.**
**As of 11:59 BST, buy Carillion’s shares at 340.80p.**
**As of 11:59 BST, sell Carillion’s shares at 340.50p.**

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