Contractor beats Middle Eastern joint venture in bidding game by offering an extra 拢2m for the private firm.
Balfour Beatty has snatched private contractor Mansell from under the nose of a Middle Eastern joint venture by offering 拢2m more for the company.

Balfour Beatty entered the fray several months after its rival but trumped it with a 拢42m bid, announced on Wednesday.

Mansell chief executive Philip Cleaver said: 鈥淭here wasn鈥檛 much between the offers. We made a decision to enter exclusive talks

with Balfour Beatty six weeks ago.鈥�

Mansell shareholders now have three weeks to approve the deal.

The proposed offer, tipped by 好色先生TV last month (3 October,

page 18), also means that Mansell becomes part of a listed company. The management has long harboured ambitions to float the company but has been unable to

do so because of a 拢30m pension deficit. This also reduced the value

of the company.

The pension fund will continue to be run by Mansell, which aims to erase the shortfall over the next

10 years, but Balfour Beatty will cover it if there are any unforeseen difficulties. Mansell was valued by Balfour Beatty at 拢55m but after accounting for the deficit and associated deal costs this was reduced to 拢42m.

Mansell will be a stand-alone business within the Balfour Beatty empire. Its chairman, Eric Anstee, and two non-executive directors

are expected to leave but no redundancies are expected among the workforce.

A spokesperson for Balfour Beatty said that the companies were a good fit because they operated

in different markets. He said: 鈥淏alfour Beatty works in the upper stratosphere of projects, like the major PFIs, and the average project is worth 拢11m-拢12m, with a two-year duration. Mansell鈥檚 average is 拢1m over six months. It also works in social housing and fit-out, where we don鈥檛 operate.鈥�

The deal gives Mansell access to projects that Balfour Beatty works on, such as fit-outs on PFI projects.

Mansell鈥檚 financial targets remain unchanged. It made a pre-tax profit last year of 拢10.6m with a 2% margin. It aims to raise this to 3% in three years.

Analysts praised the deal, but were surprised that Balfour Beatty had bought a UK firm. Last year the contractor tried to buy JA Jones in an attempt to expand into the USA. One said: 鈥淚 thought its ambitions were international, not local.鈥�

Mansell had been courted by the Middle Eastern joint venture for more than a year but it was caught off guard by Balfour鈥檚 intervention about three months ago.