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Interserve ousts Costain in Mouchel takeover battle

It has emerged that Interserve is the company in advanced talks with Mouchel over a tie-up, after Costain stated yesterday that it was no longer involved.

Interserve has confirmed that it has approached the board of Mouchel with an indicative proposal to acquire the company. Discussions between Interserve and Mouchel are ongoing and Interserve has been given access to certain diligence materials.

Confusion descended on the Mouchel takeover saga yesterday after Costain declared it was not the firm in advanced negotiations to buy the consultant.

Mouchel yesterday morning confirmed that it was in “advanced discussions” with a potential buyer, now confirmed as Interserve.

Costain, the firm that has been pursuing Mouchel since December, said it is not involved. “The board of Costain notes the announcement by Mouchel … and confirms that Costain is not the party which is in advanced discussions with Mouchel,” it said.

But it did admit it had approached Mouchel with a third offer last week.

“Following the completion of comprehensive initial due diligence, including management meetings with Mouchel, the board of Costain confirms that it approached the board of Mouchel on 17 February with a revised proposal to make a recommended share and cash offer for the entire issued and to be issued share capital of Mouchel,” it said.

Mouchel has not commented on its response to that offer.

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”.

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.

Costain said it remained fully committed to delivering its “Choosing Costain” strategy, a key plank of which is expanding its consultancy offering. It said it was progressing “a number of options”.

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