Balfour Beatty has rejected a third, £2bn takeover offer from rival construction firm Carillion, sending its shares down sharply.
The revised Carillion proposal offered Balfour shareholders 58.268% of the combined company, up from the previous 56.5% share. Balfour Beatty shares jumped in the wake of the announcement, but are currently down 6% this morning after rejecting the offer.
Balfour Beatty's board said it has considered the terms of the merger proposal, worth £2bn, but identified two major concerns.
These are Carillion's strategy to reduce the scale of the UK construction business at a time of market recovery, and to terminate the sale of US subsidiary Parsons Brinkerhoff.
In a note to investors, Balfour Beatty said the revised proposal was only a little different from the previous one: "The board has unanimously concluded that the proposal is not in the best interests of its shareholders and has decided to reject the proposal.
"Therefore the Board will not be seeking an extension to the PUSU (“Put Up or Shut Up”) deadline of 5pm on 21 August 2014."
Instead, the firm will focus on concluding the sale of Parsons Brinkerhoff, returning up to £200m of capital to shareholders and recruiting a group chief executive.
