BOVIS' PROPOSED stock market flotation was scrapped this week after parent P&O accepted a £285M takeover bid from Australian property group Lend Lease.
The deal also saw P&O cut the cash dowry accompanying Bovis from £100M to £70M, effectively boosting the value of the sale to £315M.
P&O had originally hoped to raise more than £330M by selling Bovis to WS Atkins at the end of last year (NCE 3 December 1998).
However, the deal fell through.
The recent interest rate rise is thought to have knocked the sale price to Lend Lease. The increase and fears of another rise this week have knocked 14% off the value of construction shares in the last month.
A Bovis spokesman said the deal would strengthen its presence in Australia and South East Asia, where Lend Lease employs 1,200 project managers. Bovis employs 500 staff in the region and has been looking to expand.
He said the two firms had developed a strong synergy after working together on the huge Bluewater retail project in Kent.
Bovis already earns 3% of its annual fee income from Lend Lease projects and is working with the Australian company on projects in Dundee, Solihull, Warsaw and Madrid.
Lend Lease's core activities are property and financial services. It also owns an Australian contracting business. The Lend Lease group employs 4,630 staff and has been heavily involved in the development and project management of the Olympic village and aquatic centre for next year's Australian Olympics.