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WSP tipped to buy Parsons Brinckerhoff as Carillion deal countdown continues

Engineering consultancy WSP Global is favourite to buy Balfour Beatty’s US-based consulting arm Parsons Brinckerhoff, according to reports.

Various national media outlets reported that WSP Global is in advanced talks to buy Parsons Brinckerhoff for $1.2bn (£717m).

It was reported that negotiations between WSP and Balfour Beatty were at a critical stage, with a formal agreement possible in the next 10 days.

It added that WSP is not yet in a formal period of exclusive talks about the deal, but had edged ahead of rival bidders, including Atkins.

Balfour Beatty put its profitable consulting arm up for sale after issuing a £30m profit warning in May.

Disagreements over the sale of Parsons Brinckerhoff caused merger talks between Balfour Beatty and Carillion to rupture earlier this month.

Carillion’s offer required Balfour Beatty to keep Parsons Brinckerhoff within the combined business, despite previously acknowledging Balfour Beatty’s planned sale of the business.

Balfour Beatty said last week it expected to return around £200m to shareholders from the proposed sale of PB.

The price of £717m would be above previous market expectations of a sale valued at around £600m-£650m.

Balfour Beatty’s latest rejection of Carillion’s offer last Friday leaves Carillion with just two days to make an offer for Balfour under takeover rules.

Yesterday, Standard Life Investments, a significant shareholder in both firms, made a public statement on the proposed merger.

Its head of equities David Cumming told the BBC there was “scope for Carillion to modestly improve its terms” to Balfour Beatty shareholders ahead of Thursday’s deadline.

WSP was a UK-based engineering group bought by Canadian rival Genivar in 2012. The combined group then rebranded under the WSP name in 2013.

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