Jarvis administrator inundated as predators scent a killing

Firms flock to make bids for the separated divisions of the failed rail maintenance group

The carcass of Jarvis, the failed rail maintenance group, is being circled by hungry predators this weekend.

Up to six firms are understood to have approached administrator Deloitte about snapping up the facilities management division, Jarvis Accommodation Services (JAS), since Deloitte was appointed on Friday.

Half of JAS's 20 contracts are provided to Semperian, which has bought up a number of Jarvis' Private Finance Initiative stakes in public sector projects, such as schools and hospitals in recent years. Semperian has the right to cancel these contracts should they transfer to a new owner.

JAS is profitable and is being run as a going concern, meaning that Deloitte will sell the division once a suitable offer is achieved.

Jarvis's rail plant and equipment is likely to be bought out by Network Rail, the company's major customer. It is understood that there have been a number of inquiries regarding the group's rail maintenance contracts. Balfour Beatty and Carillion, the construction groups, are considered likely suitors.

Jarvis was the centre of one of the biggest industrial stories of the New Labour years. However, it struggled after the Potter's Bar rail crash of 2002, for which many held it responsible.

Jarvis would almost certainly have survived its recent difficulties had it been sold in 2008 when The Independent on Sunday disclosed the business was being hawked for sale.

It is understood that Caterpillar, the US manufacturer, was competing against a private equity group to buy the company. It was on the verge of making a formal offer for between £30m and £40m – a low price tag for the group – when Lehman Brothers, the US bank, collapsed, causing Caterpillar to freeze all acquisitions.

An industry source said the deal's failure destroyed the group's prospects: "Jarvis would have been part of a big multinational and we wouldn't be talking about their problems now," he said.

It has also been suggested that Laing O'Rourke approached Jarvis in 2005, although the owner, Ray O'Rourke, has denied this was the case.

Jarvis, chaired by the former Conservative Party transport minister Steven Norris, suspended its shares last week after its lenders Bank of America and Bank of Ireland refused to support the company any longer.

HMRC was thought to be close to pulling the plug and the banks, owed £15m, decided to make their claims first.

Nick Edwards, Deloitte partner and joint administrator, said on Friday: "Unfortunately, Jarvis plc reached a position where a substantial funding gap meant they were unable to continue trading.

"Our immediate priority will be to work with stakeholders to stabilise the business while we identify which parts we can continue to trade and seek buyers for as going concerns."

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