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Carillion trounces Balfour Beatty in battle for Mowlem

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CARILLION'S DECISION to increase its offer for Mowlem from £291M to £312M effectively killed off chances of a Balfour Beatty counter bid, it emerged this week.

alfour Beatty formally announced last Wednesday that it would not be bidding for Mowlem despite having previously expressed interest in buying the company.

Balfour Beatty said that it would have needed to put in a bid worth around £350M to have any chance of eclipsing Carillion's revised offer.

Carillion initially offered Mowlem a bid worth around 205p a share in early December, but increased it to 220p on 14 December after Balfour Beatty expressed interest (NCE 15/29 December).

Balfour Beatty said its chances of making a successful bid also weakened in mid December when more than 60% of Mowlem shareholders indicated they would accept Carillion's revised offer.

'When we look at a company or a prospective acquisition, we look at the value we think there is in the company, ' said a Balfour Beatty spokesman.

After Carillion increased its offer from 205p to 220p a share and received irrevocable acceptances from some of its shareholders, we would have had to pay between 245p to 250p'.

Instead Carillion has agreed to sell Balfour Beatty two of Mowlem's non-core businesses for £20M if the takeover goes through. One of the businesses is Texas-based construction management firm Charter.

This is expected to complement Balfour Beatty's US subsidiary Heery, which is weak in Texas. Charter's education sector skills are also expected to complement those of Heery.

The other is Derbyshirebased rail components maker Edgar Allen, which will add to Balfour Beatty's existing rail components business.

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