Contractor is still pursuing 鈥榞olden opportunity鈥� of buying US firm despite City鈥檚 refusal to back a bid.
Balfour Beatty鈥檚 determination to expand in the USA was underlined this week when it emerged that it was still in talks to buy JA Jones two weeks after it said it could not afford to do the deal.

City sources said Balfour was so keen to buy the US subsidiary of failed German contractor Philipp Holzmann that it may be willing to finance it with a bank overdraft.

The contractor had intended to raise funds by issuing shares, but the slide in its stock market value ruled this out.

A senior City source predicted that Balfour would arrange an overdraft then go to investors for the money once the stock market had recovered, possibly next spring. 鈥淚t would be silly to issue shares when they are so low and issuing loan stock won鈥檛 do because the administrators want cash,鈥� he said.

鈥淚t鈥檚 a golden opportunity for Balfour to get into the big league of global contractors so it鈥檒l be looking at any way to raise the cash. My feeling is that it will go for it and worry about finding the money later, but that puts pressure on chief executive Mike Welton and his team to find the mechanism to deliver the cash.鈥�

Balfour had been in talks with Holzmann鈥檚 administrators for three months over the acquisition of JA Jones but last month announced that its falling share price (see graph) and general decline in the stock market had put paid to hopes of buying the 拢2bn-turnover business.

The deal, worth up to 拢250m, would have doubled the group鈥檚 size. Balfour has spent 拢9m on the deal.

It emerged last week that Balfour was Holzmann鈥檚 administrator鈥檚 preferred bidder, and was still in talks to buy JA Jones. This led to the speculation that the group was trying to arrange other funding.

好色先生TV has learned that three of Balfour鈥檚 major institutional investors rejected a plan to issue shares to pay for JA Jones because of the state of the stock market. 鈥淭here鈥檚 no money about for deals like that,鈥� said one analyst.

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