Amey agrees to £81m bid from Spain's Ferrovial

Amey, the troubled PFI contractor, was put out of its misery yesterday after the company's board accepted an £81m cash offer from Spain's biggest construction company.

Ferrovial, which is listed in Madrid and has a market capitalisation of €3.7bn (£2.6bn), has agreed to pay 32p a share for Amey, a 10 per cent premium to its price in January the day before the company disclosed it had received a number of takeover approaches.

The agreed deal marks the end of a turbulent 12 months during which Amey has lost 90 per cent of its value, parted company with a chief executive and two finance directors, found its accounting policies under fire, scrapped the dividend and been brought to the edge of collapse by a debt-funding crisis.

The offer has already been accepted by Meditor Capital Management and Sterling Investment, the two vulture funds which between them hold 32.6 per cent of Amey's shares and have been agitating for a break-up or sale of the group for months. They can only withdraw their acceptances if an offer of 34.5p or more is made. Amey, in turn, would have to pay a break fee of £471,000 if it accepted another bid.

Mel Ewell, who will remain as chief executive after the takeover, said Ferrovial would give Amey the "financial muscle" it needed to develop its PFI business. In particular, it will enable Amey to find the £60m it needs to pay for its one-third stake in Tubelines, the consortium which has taken over part of the London Underground.

Although Ferrovial is Europe's second-biggest construction company, its UK presence is limited to a 50 per cent stake in Bristol airport.

Mr Ewell said it was one of a number of companies that had expressed an interest in Amey after its advisers, Deutsche Bank and Hawkpoint, were instructed to auction off the business.

Ferrovial first approached Amey last November to seek what it called "initial discussions" and made a more formal approach in January. It has been looking to buy a PFI contractor in the UK for two years but was deterred by the price until the opportunity arose to buy Amey so cheaply. Amey shares closed last night at 32.25p compared with a 12-month high of 350p.