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Kier given until next week to table May Gurney bid

Contractor Kier has been given until 26 April to say whether it will table a bid to take over contractor May Gurney.

Last week Kier confirmed that it was looking through May Gurney’s books as part of a due diligence exercise before deciding whether or not to mount a rival bid to Costain’s all-share merger offer (News last week).

That deal would see Costain shareholders owning 53% and May Gurney shareholders 47% of a merged company which would trade as Costain May Gurney.

The combined firm would have revenues of around £1.6bn and a forward order book of around £3.9bn.

This deal, subject to confirmation by shareholders, is expected to become effective on 6 June.

Kier made public its interest as soon as the Costain deal was announced.

Under stock market rules Kier must now state whether or not it will make a firm counter offer for May Gurney by 5pm on 26 April.

Kier believes May Gurney would make a good fit with its existing businesses.

“Kier holds May Gurney in high regard and views it as a good quality support services business with a range of services which complements Kier’s offering,” said a Kier statement.

“Kier believes that a combination of Kier and May Gurney would create significant value for shareholders, establishing a wellbalanced business.”

The statement added that Kier has made previous attempts to discuss a potential combination with May Gurney and that it had been monitoring the company’s recent performance.

Costain last made an offer for a major firm in 2011, when it got dragged into a bidding war for Mouchel with Interserve.

Both companies eventually abandoned their bids.

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