Balfour Beatty receives four bids for Parsons, terminates negotiations with Carillion

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Balfour Beatty receives four bids for Parsons, terminates negotiations with Carillion

On July 31st, Balfour Beatty announced that it is terminating discussions with Carillion regarding a possible merger with immediate effect. A press release by Balfour Beatty said:

"The termination of discussions follows Carillion's wholly unexpected decision to only progress the possible merger in the event that Parsons Brinckerhoff remained part of the potential combined entity. This change is contrary to the basis upon which the Balfour Beatty Board agreed to engage in preliminary discussions. It is also contrary to the joint announcement released on 24 July 2014 which confirmed that the sale of Parsons Brinckerhoff would be unaffected by the merger discussions and also a presentation to Balfour Beatty's Board by Carillion on 28 July 2014. This change in the proposed terms is not acceptable to the Board of Balfour Beatty."

Balfour Beatty said it will proceed in accordance with its own business plan, including the competitive sale process of Parsons Brinckerhoff.

The Board of Carillion made also announcement in response to the statement by Balfour Beatty. Carillion said they are surprised by Balfour Beatty's reaction as the work to date had led to increased confidence in the potential to realise very material value for the benefit of both sets of shareholders.

The Board of Carillion continues to believe in the powerful strategic rationale of a combination and the capability of such a combination to create very significant shareholder value. The Board of Carillion will therefore give further consideration to its position in the light of its requirements that (i) due diligence would have to be concluded to its satisfaction; and (ii) the Boards of Carillion and Balfour Beattywould have to recommend a combination to their shareholders.

In fact, the bidding process for Parsons Brinckerhoff is moving forward. According to the British press, four bidders could have submitted bids for Us engineering firm: British engineering group WS Atkins, Canadian engineering group WSP and two private equity firms.

The bidding process, conducted by Goldman Sachs, is at a second-round stage, with sources suggesting one of the two engineering firms is more likely to win out rather than one of the financial suitors.Balfour Beatty announced it will also continue to actively progress its search for a Group CEO.

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