UK construction firm Costain has increased its all-share offer for the business services group Mouchel, valuing it at around £150 million.
The revised offer values each Mouchel share at about 135 pence. Mouchel has already rejected one bid from Costain, made in December last year.
Berkshire-based Costain is currently focusing on growing its consultancy and maintenance activities alongside its construction and engineering capability. The company said that particular focus over the next 10 years would be on infrastructure, particularly highways, rail and airports; environment, particularly water and waste; and energy & process, particularly nuclear, power, and hydrocarbons & chemicals.
As at 30 June 2010, 14 per cent of Costain’s £2.5 billion order book was in operations and maintenance.
The company said it now hopes to accelerate the development of an integrated business, providing front-end engineering consultancy, construction and ongoing care and maintenance services.
London-based Mouchel is a consulting and business services group working with government agencies, local authorities, government-regulated industries and the private sector in similar sectors to Costain.
As at the end of November 2010, Mouchel's order book had been maintained at £1.8 billion and its pipeline of tenders and near-term opportunities had increased to £2.6 billion.
Commenting on the revised offer, chairman of Costain David Allvey, said: “The Board of Costain continues to believe that there is a compelling strategic rationale for combining Costain and Mouchel and creating an enlarged group with enhanced critical mass to meet the customer trend towards larger and longer-term bundled solutions.”
He went on to say: “Our ability to formalise a proposal that is attractive to Mouchel’s shareholders and other Mouchel stakeholders and is recommendable by the Board of Mouchel is dependent upon gaining access to satisfactory due diligence in order to confirm our key assumptions, including those relating to synergies.”
Costain was part of the original Channel Tunnel consortium and has also worked on projects including Dubai International Airport, the Thames Barrier and the Cardiff Bay Barrage.
