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Costain takeover of Mouchel nears completion

Mouchel has this morning confirmed that it is in”advanced discussions” with a potential buyer, believed to be contractor Costain.

On 21 January Mouchel announced that it had received a number of approaches which might or might not result in an offer being made for the company.

However, Costain was the only firm to publicly declare an interest in the company. It made an offer of 135p per share, valuing the company at around £150M. At the time Mouchel’s board advised shareholders to ignore the approach,

This offer was a 28% increase on a previous offer of £119M made by Costain at the beginning of December, but still more than half the 300p per share offered by VT Group in February last year after a three month pursuit of the firm.

Then, Mouchel’s board said the offer “significantly undervalued the firm”.

But today, Mouchel’s board said it was “pleased” to confirm that it is now in advanced discussions with one potential offeror and that it has signed a co-operation agreement with that preferred trade purchaser in relation to a potential offer being made for the company.

“Although the board of Mouchel considers that the company has a strong future as an independent business, it believes that the strategic logic of a combination of Mouchel and the preferred possible offeror would provide the best option to deliver value to shareholders,” it added.

The making of any offer by the preferred possible offeror remains subject to a number of pre-conditions, including the satisfactory completion of mutual confirmatory due diligence and the arrangement of financing which is likely to take a number of weeks.

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