The dispute over whether Parsons Brinckerhoff should be sold was at the heart of the rejection of a second deal being tabled to merge Balfour Beatty and Carillion into a single super-contractor, it emerged this morning.
Balfour Beatty confirmed it had rejected a revised proposal put forward by Carillion at a meeting between the two on 3 August, after the failed first attempt at a merger.
The risks of derailing Balfour’s sale of Parsons Brinckerhoff, which Balfour believes remains a key strategic objective of the Group and is well advanced, was too high, it said. In its interim results, also announced today, Balfour Beatty said such a sale was expected to return £200M to shareholders.
A deal was struck between the two last month, but was followed by a change of heart by Carillion over the sale of Parsons Brinckerhoff, which was already underway ahead of the announcement.
Carillion mooted on 3 August to recompense bidders for the consultant if the merger deal fell apart and a sale was to continue.
But Balfour said the risks of a failed Parsons Brinckerhoff sale and the fragility of its UK construction revenue meant it had rejected the second proposal.
Carillion had yet to make any statement on the matter.
- Update 9.15am Balfour Beatty executive chairman Steve Marshall in a statement to investors has said strong competitive interest is being maintained in Parsons Brinckerhoff and round three bids are expected shortly