Carillion sweetens offer for Balfour Beatty in third takeover bid

Carillion promises investors cost cutting measures and an additional cash dividend

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The Independent Online

Carillion has increased the pressure on rival Balfour Beatty by promising investors cost cutting measures and a dividend as it attempts to enact a merger.

The company said its cost base could be reduced by £175 million by late 2016 in a statement it said it had released without the consent of Balfour Beatty.

Carillion said it could make the savings across its property portfolio, back office functions and supply chain.

Carillion earnings could be “significantly enhanced” as a result and proposed that Balfour's shareholders receive an additional cash dividend of 8.5 pence per Balfour Beatty share.

Carillion today posted a 5 per cent rise in pre-tax profits for the six months to June 30 in marked contrast to the 53 per cent slump in profits reported by Balfour Beatty on Monday when it rebuffed a second Carillion merger approach.

Carillion chairman Philip Green said: “Carillion continues to perform in line with the Board's expectations, reflecting the benefits of the early actions we took in response to the economic downturn, notably the planned rescaling of our UK construction business, together with our continuing strong work-winning performance.”