好色先生TV

Balfour Beatty鈥檚 decision to call off merger talks with Carillion leaves it in a 鈥渨eak鈥� position and open to a hostile takeover bid, analysts have said.

This morning, that it had called off its merger talks with Carillion, saying Carillion had demanded Balfour鈥檚 consultant arm Parsons Brinckerhoff, which it is currently selling, should form part of the deal.

When the two firms announced they were in merger talks last week they said the sale of Parsons would 鈥減roceed unaffected鈥� by any merger.

Balfour Beatty today said it had terminated the discussions over a merger following Carillion鈥檚 鈥渨holly unexpected decision鈥� to insist that a possible merger include Parsons Brinckerhoff.

Carillion to end the talks, saying it still believed there was a 鈥減owerful鈥� case for a merger of the two construction giants.

Following Balfour鈥檚 announcement today its share price fell by 6%, trading at around 拢2.38, while Carillion鈥檚 fell by 3%, trading at around 拢3.40.

Stephen Rawlinson, an analyst at Whitman Howard, said Balfour鈥檚 announcement that it was walking away from the talks was 鈥渙dd both in tone and content鈥� and left the firm in a 鈥渨eak position鈥�.

He added: 鈥淲e can see that Balfour Beatty might be annoyed that Carillion may now think that the merged entity might wish to keep Parsons having previously indicated the sale could go ahead.

鈥淏ut equally, a hasty sale of Parsons from a position of weakness which Balfour Beatty is now in does not help either company.鈥�

Rawlinson added that Balfour Beatty 鈥渁ppears to have taken the view that the sale of Parsons is more important than working with Carillion to create synergies that will deliver we believe around 拢200m of annual improvement, permanently and create a more robust and profitable business鈥�.

He added: 鈥淭he Balfour Beatty priority is to fund a business that is failing with asset sales rather than work with Carillion to create a much more robust business.鈥�

Balfour Beatty had announced its intention to sell its consultant arm Parsons Brinckerhoff to refocus on its UK and US construction businesses in May, with the move widely seen as an abandonment of its long-term strategy of diversifying into a global construction and professional services company.

The announcement followed a dire period for the firm, with a series of profit warnings prompting the exit of chief executive Andrew McNaughton in May.

Rawlinson said he doubted that Balfour Beatty would be able to get the $900m (拢533m) that it wants for Parsons Brinkerhoff given Balfour Beatty鈥檚 position of weakness, following its recent troubles.

He said that although Balfour Beatty paid $636m (拢377m) for Parsons in 2009 he suspected the consultant鈥檚 $91m (拢54m) pension deficit had 鈥渘ot improved and potentially got much worse鈥�.

He added that Carillion was 鈥渃orrect鈥� to want to keep Parsons as part of any future combined entity.

He said: 鈥淔rom Carillion鈥檚 perspective the discussions were always going to be low risk and the change of heart on the sale of Parsons was correct in our view given that the integrated model works in the USA from what we can see, but not in the UK, especially in the type of regional contracting on which Balfour Beatty is focused.

鈥淭he prospects for Carillion remain very positive and this may be a lucky escape.鈥�

Joe Brent, analyst at Liberum, said Balfour Beatty could still find itself on the receiving end of a hostile takeover bid from Carillion, and would be seen as 鈥渋n play鈥� by other potential bidders.

He said: 鈥淲hilst Balfour Beatty is prevented from bidding for Carillion [because of stock market rules] the reverse does not apply.鈥�

Brent said it seemed that Balfour Beatty鈥檚 statement has taken Carillion 鈥渂y surprise鈥�.

He said: 鈥淚t is surprising that Carillion wanted to keep Parsons Brinckerhoff, given that they have historically been opposed to owning a consultant.

鈥淧erhaps Carillion could only make the maths stack up by owning Parsons Brinckerhoff, which may be a source of some worry for Balfour shareholders.鈥�

Kevin Cammack, analyst at Cenkos, said Balfour鈥檚 decision to reject Carillion鈥檚 demand that Parsons be included in any merger deal showed that the sale of the consultant was either 鈥渨ell advanced鈥� and possibly 鈥渟ubject to exclusivity or due diligence鈥�.

He added that he thought Carillion鈥檚 change of heart could have been driven by Carillion shareholders being reticent to accept any merger that did include Parsons Brinckerhoff.

This week market commentators suggested a number of firms were looking at 拢167m-turnover Parsons, which Balfour Beatty acquired in 2009, with Atkins, WSP and CH2M Hill all mentioned as possible buyers, along with steel giant Tata and Chinese firms looking to enter the UK professional services market.

Atkins, WSP, CH2M Hill this week all declined to comment on whether they were interested in Parsons.