Private equity in bid approach for troubled John Laing

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John Laing, the private finance initiative contractor, has received a takeover approach, sendingshares in the company up more than 20 per cent.

Analysts said a bidder would be taking advantage of recent weakness in the company's share price, after trading difficulties and the ending of previous takeover talks. The group said: "The board of John Laing notes the recent rise in the share price. The board confirms it has received a non-binding proposal with regard to a possible offer." John Laing shares closed up 55.5p at 331p, valuing the business at £774m.

The company did not identify the predator, but analysts pointed to interest from private-equity groups.

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

Under PFI deals, companies typically undertake the design, building, finance and operation of public projects and get paid, for example, over 20 or 30 years. Most risk occurs in the early years of a contract, when building costs have to be managed. The final stage, operating the asset, is relatively risk free, and there is a growing secondary market for maturing PFI contracts, of which John Laing has several.

As well as building schools and other infrastructure, Laing runs the Chiltern railway franchise.