Exclusive: Apollo Global in bid for U.S. construction company Tutor Perini - sources

(Reuters) - Private equity firm Apollo Global Management Inc APO.N has approached Tutor Perini Corp TPC.N, one of the largest U.S. general contractors, with a close to $1 billion acquisition offer, people familiar with the matter said on Friday.

Apollo’s bid for Tutor Perini comes as the construction company is trying to recover from what its CEO Ronald Tutor this week called “an extremely disappointing year” in 2019. It has struggled with the delivery of some electrical and mechanical projects, though analysts have pointed to the company’s strong project backlog as grounds for optimism.

Apollo has made an offer of around $17 per share in cash for Tutor Perini, one of the sources said. There is no certainty that Tutor Perini will accept Apollo’s bid or that it will successfully negotiate a deal, the sources added.

The sources asked not to be identified because the matter is confidential. Apollo declined to comment, while Tutor Perini did not immediately respond to a request for comment.

Tutor Perini shares rose 23% to $14.83 on the news in New York on Friday. The shares have lost 30% of their value in the last 12 months, compared to a 7% rise in the S&P 500 Index.

Based in Los Angeles, Tutor Perini has worked on some of the biggest infrastructure projects in the United States, including Newark Liberty airport’s Terminal One and the San Francisco subway’s extension to Chinatown.

The product of a merger between Tutor-Saliba Corp and Perini in 2008, the company worked on approximately 1,300 construction projects last year. Tutor, who is also the chairman of the company’s board, owns about 16% of Tutor Perini, making him its largest shareholder.

Tutor Perini has “meaningful scale and diversity across several US nonresidential building and civil infrastructure construction markets”, but is struggling with thin margins and unbilled receivables, credit ratings agency Moody’s Investors Service Inc said earlier this month.

Tutor Perini had total debt of $834.5 million as of the end of December.

Reporting by Rebecca Spalding and Greg Roumeliotis in New York; editing by Diane Craft and Nick Zieminski