Balfour Beatty, Carillion resume merger talks -Sunday Times

LONDON Sun Aug 10, 2014 7:00am EDT

LONDON Aug 10 (Reuters) - British infrastructure company Balfour Beatty and construction firm Carillion have resumed talks on a possible 3 billion pound ($5 billion) merger deal, the Sunday Times reported, citing unnamed financial sources.

Balfour Beatty said two weeks ago it had broken off merger talks after Carillion insisted it cancel the planned sale of its U.S. unit and keep it within the merged company, just days after a possible deal was revealed.

Members of the Balfour Beatty board, led by Executive Chairman Steve Marshall, met with Carillion on Friday evening for talks on how to save the deal, the paper said.

Carillion has "made a tweak" to its offer in an effort to win Balfour's agreement, the newspaper reported, but did not elaborate further.

The basic deal that would give Balfour shareholders a majority stake in the combined company remains unchanged, the paper cited the sources as saying.

Balfour has asked for time to make a decision, the Sunday Times reported, however Britain's takeover rules dictate it must do so by August 21.

A spokesman for Balfour declined to comment on the report, while officials at Carillion were not immediately available for comment.

Carillion came forward with its offer after a difficult 18 months for Balfour, during which the company has had to issue a series of profit warnings and lost its chief executive.

Balfour announced in May that it would sell its U.S design and engineering unit Parsons Brinckerhoff. It acquired the business in 2009 for 636 million pounds but said it had failed to deliver significant benefits.

British engineering firm WS Atkins and Canada's WSP Global to be competing for the business, The Telegraph reported last week.

Analysts estimate a merger between Balfour and Carillion could create cash savings of 250 million pounds. ($1 = 0.5962 British Pounds) (Reporting by Li-mei Hoang; Editing by Raissa Kasolowsky)

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