Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Atkins share top up in Bovis buy

CONSULTANT WS ATKINS is expected to offer 14% of its shares to Bovis parent P&O to avoid financing the 330M takeover of the management contractor with a rights issue, one City analyst said this week.

Analyst at stockbroker Henderson Crosthwaite Geoff Allum said he expected the current volatility of the London stockmarket to make a rights issue too risky.

Last week Atkins confirmed it was discussing buying Bovis from P&O (News last week). A joint statement issued at the time indicated that P&O would 'hold a material continuing interest' in the merged Atkins and Bovis business.

Allum said Atkins will instead borrow money to finance the deal, but that it will only be able to raise around 265M. As a result it is expected to issue new shares to P&O to make up the difference.

'WS Atkins could not fund such a price from its balance sheet without issuing paper,' he says in an investors circular. 'Given current market conditions and the substantial number of shares held by the (Atkins) family and directors, a rights issue may not be easily possible.'

Interim results published by WS Atkins on Monday showed pretax profits of 15M on turnover of 200.9M during the six months to the end of September. This compares with a pre-tax figure of 12.7M and turnover of 175.3M reported for the same period last year.

Chief executive Mike Jeffries said that operating margins had tightened during the first half, because Railtrack's rate of investment spend had been slower than expected.

(see Commentary page 14)

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.