CH2M Hill has withdrawn its takeover bid for consultant Scott Wilson after American consultant URS upped its original offer by more than £60M.
URS has now offered Scott Wilson 290p per share, valuing the company at around £223M and beating CH2M Hill’s offer of 245p per share, valuing the firm at £189M.
The Scott Wilson board had previously recommended URS’ first offer of 210p per Scott Wilson share, valuing the company at £161M.
Scott Wilson chairman Geoff French had said that the original URS offer was “compelling” (News last week). He used the same term to describe the revised bid and the board has indicated that this offer will now be recommended to shareholders.
They will be asked to vote on the takeover later this month.
CH2M Hill said it had noted the announcement of the revised cash offer from URS and that it was withdrawing its bid.
The programme manager, which is Scott Wilson’s largest shareholder after buying just under 10M shares last week, will follow the Scott Wilson board’s recommendation to back URS’s bid.
CH2M Hill chairman and chief executive Lee McIntire said his firm had pulled out because the price was now too high.
“The URS bid reflects the underlying value of the firm”
“CH2M HillL’s long-term strategy is focused on organic growth, based upon delivery and strong customer service, and selective acquisitions to enhance our geographic and market sector presence,” he said.
“While Scott Wilson is an excellent company and an attractive cultural fit, it is not felt to be value enhancing to us at the current valuation.”
Scott Wilson chairman Geoff French said the offer reflected the underlying value of the firm.
URS chief executive Martin Koffel said the combination of URS and Scott Wilson would create a global business “with the financial resources to invest in further growth for the benefit of the enlarged group’s clients and employees”.
It is planned that Scott Wilson will effectively become URS’s overseas arm.
Scott Wilson chief executive Hugh Blackwood will join the URS main board, and will oversee the combined operations of Scott Wilson in the UK, Ireland, Europe, India, Middle East and China.
He said the two firms share the same strategic vision of operating in a global market.
The US firm currently makes just 8% of its money overseas. With Scott Wilson that will rise to 14% of total revenues.