McAlpine rejects fresh Carillion bid

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The Independent Online

The construction group Alfred McAlpine has rejected two takeover approaches from Carillion – the highest at £584m – saying they "materially undervalued the company".

McAlpine, which is working on a demerger of its construction and support services arms, was first approached in August, when Carillion said it could be willing to pay £543m.

The second approach – yesterday – was given similarly short shrift. It came after the company's share price had risen sharply on speculation that Carillion, valued at £1.2bn, was lining up a bid.

Shares in Carillion eased 25.5p to 389p, as investors feared that the company would return with a third approach. The first two would have seen the company paying 25 per cent of the proposed bid price in cash and the rest in shares.

In a statement to the Stock Exchange, McAlpine said it based the decision to reject the latest 570p-a-share cash and paper offer on "the company's strong recent results; the expected value from the demerger and the low impliedpremium".

It went on: "On 2 August the company released its interim results, which showed significant growth of 27 per cent, in underlying profit before tax, demonstrating the continued momentum across the group during that period."

Carillion, however, did not rule out a further approach, saying it would "continue to evaluate all strategic opportunities including Alfred McAlpine, based on a disciplined and value-driven approach to earnings indebtedness and returns".

The move follows the acquisition of another rival, Mowlem, for £313m last February.

McAlpine shares finished up 6p at 538p.

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