Costain has tabled a “significantly enhanced” new proposal to the board of Mouchel for an offer valuing its shares at 153.2 pence.
The revised proposal values the consultancy at £175 million, £25m up on the offer made earlier this month.
This third approach, made on 19 January, a statement says, “represents a premium of approximately 171 per cent to the closing Mouchel share price of 56.5 pence per share on 3 December 2010 (the last business day prior to Mouchel entering into its current offer period).”
Costain chairman David Allvey, said in the statement: “The strategic rationale for a combination has been widely supported and following extensive discussions with both sets of shareholders we have now significantly enhanced our proposal.
“We firmly believe that a combination of the two businesses is clearly in the best interests of both sets of shareholders and would bring resolution to the issues Mouchel faces for the benefit of its shareholders, customers and employees after a sustained period of uncertainty. Moreover, as part of a strong Costain group with a well-capitalised balance sheet, Mouchel would be better placed to compete effectively for major contracts.
“Having made our first approach to Mouchel seven weeks ago and as one of a number of options to deliver our strategy, we believe that our revised proposal is attractive to both sets of shareholders and should now encourage Mouchel’s Board to engage with us without delay.”
Costain - led by chief executive Andrew Wyllie - had an improved offer equivalent to 135 pence per share, which valued the consultancy at £150m, turned down by Mouchel at the beginning of the month, but said it hoped to convince shareholders to push for talks with Mouchel directors.
Costain’s second takeover proposal was 27.6 per cent higher than its previously rejected approach, made in December, which valued the firm at £119m.
The Revised Proposal represents:
- an increase of approximately 44.8 per cent. over the value of the original proposal by Costain as announced on 22 December 2010 and approximately 13.5 per cent. over the value of the revised proposal by Costain as announced on 6 January 2011;
- a premium of approximately 171.2 per cent. to the closing Mouchel share price of 56.5p per share on 3 December 2010 (being the last business day prior to Mouchel entering into its current offer period);
- a premium of approximately 109.7 per cent. to the closing Mouchel share price of 73.0p per share on 21 December 2010 (being the last business day prior to the date of the first announcement by Costain that it had approached Mouchel); and a premium of approximately 34.7 per cent. to the closing Mouchel share price of 113.75p per share on 20 January 2011 (being the last business day prior to the date of this announcement).