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Babtie dumps growth plan for £70M Jacobs offer

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CONSULTANT BABTIE was this week poised to scrap its ambitious five year growth plan after receiving a takeover bid from US engineering giant Jacobs, understood to be worth £70M.

It is thought Jacobs has targeted Babtie because of its strong presence in the UK transport sector.

Less than three months ago Babtie announced plans to double its turnover over the next five years, funded through a combination of borrowings and reserves (NCE 22 April).

Babtie this week refused to explain its decision to negotiate with Jacobs. Jacobs would not comment on the bid beyond a brief statement issued to the New York Stock Exchange last Wednesday.

The Glasgow based consultant has always maintained its independence and has avoided raising finance through a stock market flotation.

Taking over Babtie would increase Jacobs' annual UK fee income from £482M to £660M, according to figures in NCE's 2004 Consultants File. Top ranked consultant Atkins' fees were just £30M higher last year at £691.5M.

California based Jacobs employs 35,000 globally. Last year it made profits of $128M (£71M) on turnover of $4.6bn (£2.5bn).

Results published in April show that Babtie increased operating profits by 23% to £9.2M last year, while turnover increased to £180M.

One of UK firm's competitors said the deal would enable Babtie to use Jacobs' financial strength to bid for more and larger contracts.

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