John Laing to be sold to fund manager for £800m

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The construction firm John Laing is to be sold to Henderson, the London-based fund manager, for about £800m. The deal is expected to be announced this week.

Henderson, which has an infrastructure fund, is thought to have offered about 340p a share for John Laing, in line with what many analysts regard as a fair price for the business. But analysts at Collins Stewart argued last week that the firm was worth 370p a share.The shares closed at 323.25p on Friday, giving the business a market value of £755m.

Shares in the private finance initiative contractor shot up by more than 20 per cent last week after it admitted it had received a takeover approach. Analysts said a bidder would be taking advantage of recent weakness in the company's share price, caused by trading difficulties and the termination of previous takeover talks.

Last year, John Laing received a takeover approach believed to have come from the acquisitive Australian bank Macquarie, but those talks were terminated in December.

John Laing runs the Chiltern railway franchise and builds schools, hospitals and roads. Under PFI deals, companies undertake the design, building, finance and operation of public projects over a number of years. Most of the risk occurs in the early years, while the final stage of running the asset is relatively risk-free. With several maturing PFI contracts, John Laing is an attractive takeover target.

But the firm reported a drop in first-half profits last month and warned on its annual figures after business was hit by a tunnel collapse on Chiltern Railways.