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Carillion gives up after third Balfour bid is rejected | |
(about 2 hours later) | |
Construction firm Carillion has admitted defeat in its £2bn pursuit of rival Balfour Beatty after its third takeover offer was rejected. | |
Carillion said it was "no longer pursuing" a deal, after Balfour refused to extend the deadline for a firm offer to be agreed beyond 5pm on Thursday. | |
It must now wait six months before it can re-start negotiations. | |
Balfour shares fell nearly 8% to 235p following the news it had rejected Carillion's latest offer. | |
The improved offer for Balfour on Tuesday represented a 36% premium to the recent average price of Balfour shares. | |
Carillion had said it wanted a deal which had the full backing and cooperation of Balfour's management, arguing that there was "powerful strategic logic" in a merger. | |
But Balfour said Carillion's offer failed to address its two key concerns. | But Balfour said Carillion's offer failed to address its two key concerns. |
Balfour wants to sell its US unit, which Carillion opposed. It also said it was unconvinced a merger with Carillion would deliver the costs savings its rival suggests. | |
Carillion's improved offer would have given Balfour shareholders control of 58.268% of the combined company, rather than 56.5% under the previous offer. | Carillion's improved offer would have given Balfour shareholders control of 58.268% of the combined company, rather than 56.5% under the previous offer. |
No extension | No extension |
But Balfour said the revised offer was only a small improvement of £55m on Carillion's second offer, which was rejected on 11 August. | |
Carillion's latest offer continued to assert that it would halt the planned sale of Balfour's US business, Parsons Brinckerhoff, which has become a key block to any deal. | Carillion's latest offer continued to assert that it would halt the planned sale of Balfour's US business, Parsons Brinckerhoff, which has become a key block to any deal. |
Balfour has previously said it remains committed to the sale of the business and the return of up to £200m of capital to shareholders. | Balfour has previously said it remains committed to the sale of the business and the return of up to £200m of capital to shareholders. |
Last week, Balfour disputed Carillion's claim that a merger would provide a £1.5bn windfall as a result of savings and cut the cost base of the combined group by at least £175m a year by the end of 2016. | Last week, Balfour disputed Carillion's claim that a merger would provide a £1.5bn windfall as a result of savings and cut the cost base of the combined group by at least £175m a year by the end of 2016. |