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Mouchel rejects third takeover bid from Costain

Contractor Costain last week upped the ante in its battle for consultant Mouchel with a third takeover proposal worth more than £170M.

**BREAKING NEWS – Mouchel completes refinancing**

Costain chairman David Allvey said he hoped it would “encourage Mouchel’s board to engage with us without delay”.

Mouchel’s board urged its shareholders to ignore the approach, claiming other firms were also expressing an interest in the consultant.

Costain’s higher approach – worth around 153.2p for each Mouchel share – comes after the consultant rejected two previous moves over the past two months.

Last week’s bid marks a 45% hike on Costain’s first indicative offer, which valued Mouchel at around £118M.

But Mouchel is thought to be close to securing a refinancing deal that could help it fend off the unsolicited interest or even attract other bidders.

Mouchel said in December that it planned to have new medium term loan facilities in place by the time of its half year results announcement in March.

Last week it said it had “made significant progress since then” and that it expected to finalise the new facilities “shortly”. It said its key lenders Barclays, Lloyds and RBS all remained supportive.

It also said Costain was not the only firm showing interest in making a bid.

“We announced on 6 December 2010 that we had received approaches which would, if made, result in an offer being made for the company. Since then, we have received further approaches. We are actively reviewing these and other options.”

Costain’s bid came after Mouchel shares hit an all-time low of 56.5p in early December – down from a year high of 268p – triggered by concerns about the impact of government spending cuts and efforts to refinance.

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