News Column

Carillion offers Balfour Beatty Shareholders a 36% premium

August 21, 2014



ENP Newswire - 21 August 2014

Release date- 20082014 - Philip Green, Chairman of Carillion said 'Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the Board of Carillion remains committed to moving forward in a constructive and collaborative way with the Board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies'.

PUSU Extension

The deadline imposed by the Panel on Takeovers and Mergers for Carillion to announce a firm offer, or to announce that it does not intend to make a firm offer, is currently 5:00pm this Thursday 21 August 2014. In order for discussions to continue and for mutual due diligence to be concluded, Balfour Beatty must request that the Panel on Takeovers and Mergers extend this deadline.

From the time of full re-engagement by Balfour Beatty, Carillion expects to be in a position to announce a firm offer for Balfour Beatty within four weeks.

The Proposed Offer

Carillion's revised proposal is as follows:

All-share merger of Carillion and Balfour Beatty;

58.268% share for Balfour Beatty shareholders based on the current undiluted ordinary share capital of each of Balfour Beatty and Carillion;

In addition to the interim dividend announced by Balfour Beatty last week and to the 2014 final dividend to which shareholders of the combined group would be entitled, Balfour Beatty shareholders to receive an additional cash dividend or equivalent of 8.5 pence per Balfour Beatty share (GBP59 million in total);

Leadership team of Richard Howson, CEO; Richard Adam, CFO and Philip Green, Chairman;

Three Balfour Beatty non-executive directors to join the Board;

Enlarged group to maintain Carillion's progressive dividend policy;

Senior management team below board level to be drawn from both companies and

Remaining Parsons Brinckerhoff bidders' reasonable costs to be covered by Carillion in the event the merger goes ahead (up to GBP10 million in aggregate).

Premium

Carillion's improved offer represents a premium of:

36% to the 1 month Volume Weighted Average Price prior to 24 July 2014, the trading day immediately preceding the joint leak announcement;

30% to the closing share price on 24 July 2014 and

22% to the closing share price on 18 August 2014.

Parsons Brinckerhoff

Carillion has repeated to Balfour Beatty that it is willing to allow it to continue with its Parsons Brinckerhoff auction process, and to enter into a contract for a sale of Parsons Brinckerhoff subject to shareholder approval. However, should the merger proceed, Carillion would expect the disposal of Parsons Brinckerhoff not to be completed.

Carillion is willing to reimburse the remaining Parsons Brinckerhoff bidders' reasonable costs (up to GBP10 million in aggregate) from the date that discussions with Balfour Beatty resume, in the event that the merger goes ahead and Parsons Brinckerhoff is not sold.

Carillion will make a further announcement in due course. In the meantime, there can be no certainty that any offer will be made by Carillion or as to the terms on which any such offer might be made. The Board of Carillion would only proceed with a merger if, inter alia (i) due diligence were concluded to its satisfaction and (ii) the Boards of Carillion and Balfour Beatty were to recommend a merger to their shareholders.

In accordance with Rule 2.5(i) of the Code, Carillion confirms that these pre-conditions must be satisfied prior to the agreement of any transaction.

Carillion reserves the right to introduce other forms of consideration and/or to vary the mix of consideration.

In addition, Carillion reserves the right to make an offer for Balfour Beatty at any time on less favourable terms:

with the agreement or recommendation of the Board of Balfour Beatty;

if, otherwise than in the ordinary course, Balfour Beatty declares, makes or pays any dividend or other return of capital to its shareholders;

if a third party announces a firm intention to make an offer for Balfour Beatty on less favourable terms or

following the announcement by Balfour Beatty of a whitewash transaction pursuant to the Code.

As required by Rule 2.6(a) of the Code, Carillion is required, by not later than 5.00 p.m. on 21 August 2014, to either announce a firm intention to undertake a transaction in accordance with Rule 2.7 of the Code or announce that it does not intend to undertake a transaction, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

This deadline may be extended with the consent of the Takeover Panel in accordance with Rule 2.6 of the Code. Carillion understands that, in accordance with Rule 2.6, the Takeover Panel will take into account the views of Balfour Beatty in considering whether to grant such an extension. This announcement is not being made with the consent of Balfour Beatty.

Contact:

John Denning

Tel: +44 (0) 1902 316 426

Important Notices

This announcement is not intended to and does not constitute or form part of any offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction.

Lazard & Co., Limited ('Lazard'), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as lead financial adviser to Carillion plc ('Carillion') and no one else in connection with the possible transaction and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Lazard & Co., Limited nor for providing advice in relation to the possible transaction or any other matters referred to in this announcement.

Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited in connection with this announcement, any statement contained herein, the possible transaction or otherwise.

Greenhill & Co. International LLP ('Greenhill'), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser to Carillion and no one else in connection with the possible transaction and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Greenhill & Co. International LLP nor for providing advice in relation to the possible transaction or any other matters referred to in this announcement.

Neither Greenhill & Co. International LLP nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Greenhill & Co. International LLP in connection with this announcement, any statement contained herein, the possible transaction or otherwise.

Morgan Stanley & Co. International plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as joint corporate broker to Carillion, and no one else in connection with the matters referred to in this announcement.

In connection with such matters, Morgan Stanley & Co. International plc, its affiliates and its and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person other than Carillion for providing the protections afforded to their clients or for providing advice in connection with the contents of this announcement or any other matter referred to herein.

Oriel Securities Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting as joint corporate broker to Carillion, and no one else in connection with the matters referred to in this announcement.

In connection with such matters, Oriel Securities Limited, its affiliates and its and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person other than Carillion for providing the protections afforded to their clients or for providing advice in connection with the contents of this announcement or any other matter referred to herein.

HSBC Bank plc ('HSBC'), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting as financial adviser to Carillion and no one else in connection with the possible transaction and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of HSBC Bank plc nor for providing advice in relation to the possible transaction or any other matters referred to in this announcement.

Cautionary Note Regarding Forward-Looking Statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of Carillion and Balfour Beatty and the combined group. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'hope', 'aims', 'continue', 'will', 'may', 'should', 'would', 'could', or other words of similar meaning.

Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Carillion's or Balfour Beatty's operations and potential synergies resulting from the transaction and (iii) the effects of government regulation on Carillion's or Balfour Beatty's business.

These statements are based on assumptions and assessments made by Carillion, in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate.

By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this document could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

They are also based upon assumptions. Many factors may cause the actual results, performance or achievements of Carillion to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Important factors that could cause actual results, performance or achievements of Carillion to differ materially from the expectations of Carillion, include, among other things, general business and economic conditions globally, industry trends, competition, changes in government and other regulation, changes in political and economic stability, disruptions in business operations due to reorganisation activities, tax rates, interest rate and currency fluctuations, the failure to satisfy any conditions for the merger on a timely basis or at all, the failure to satisfy the conditions of any merger if and when implemented (including approvals or clearances from regulatory and other agencies and bodies) on a timely basis or at all, the failure of Carillion to combine with Balfour Beatty on a timely basis or at all, the inability of the combined group to realise successfully any anticipated synergies or cost reductions if and when the merger is implemented, the inability of the combined group to integrate successfully Carillion and Balfour Beatty's operations and programmes if and when the merger is implemented, the combined group incurring and/or experiencing unanticipated costs and/or delays or difficulties relating to the merger when the merger is implemented.

Such forward-looking statements should therefore be construed in light of such factors. Neither Carillion, nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Carillion does not assume any obligation to update or correct the information contained in this document (whether as a result of new information, future events or otherwise), except as required by applicable law.

No Profit Forecasts or Estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Carillion or the combined group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Carillion, as appropriate.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments.

Publication on Website

A copy of this announcement will be available, subject to certain restrictions relating to persons resident in restricted jurisdictions, for inspection on Carillion's website by no later than 12 noon (London time) on the day following this announcement. For the avoidance of doubt, the contents of such website are not incorporated into and do not form part of this announcement.


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Source: ENP Newswire


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