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Costain silent as Kier carries out due diligence on May Gurney

Kier is carrying out due diligence on May Gurney as it ponders a bid for the support services company.

Kier has been given full access to May Gurney’s ‘data room’ – which is generally a suite of confidential data – as is standard process under the Takeover Code.

Kier is yet to make a formal bid for May Gurney, which has already announced a merger plan with Costain.

May Gurney announced today that it has been dropped from the re-bidding of a roads contract in Norfolk worth up to £780m.

Costain and May Gurney revealed plans last week to create a £1.6bn-turnover infrastructure and services company named Costain May Gurney plc, with a market capitalisation of £378m.

The tie-up would see Costain acquire the entire share capital of May Gurney, with Costain chief executive Andrew Wyllie and finance director Tony Bickerstaff leading the group.

But hours later, Kier came out with a statement saying it “holds May Gurney in high regard and views it as a good quality support services business with a range of services which complements Kier’s existing offering”.

It said: “Kier believes that a combination of Kier and May Gurney would create significant value for shareholders, establishing a market-leading and well-balanced business.”

Kier said it had also made previous attempts to discuss a potential combination with May Gurney.

Some analysts suggested a Kier tie-up would offer better upside for May Gurney shareholders and expressed surprise that the support service firm’s board had not spoken to other bidders.

A Costain spokesman declined to comment.

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