The German contractor is keen to develop a portfolio of interests in private finance initiative projects. Analysts say Balfour and, to a lesser extent, Carillion would provide a good springboard for this.
Hochtief is understood to want a 25-30% stake in one of the companies, which would allow it access to management, accounts and projects without committing it to a buy-out.
鈥淭hat would be very much the German way 鈥� to test the water rather than manning a hostile bid. But it could well lead to a full bid further down the line,鈥� said one analyst.
None of Hochtief鈥檚 board directors were available for comment but a spokesperson said: 鈥淭hose are just speculations and there are no negotiations going on.鈥� Carillion denied that it had been approached by Hochtief; Balfour Beatty refused to comment.
Hochtief has a history of taking minority shareholdings but its current expansion plans were believed to be focused on majority shareholdings in a US company.
The contractor has already diversified into airport management in a bid to accrue higher margins than those associated with traditional contracting.
In March, it led a consortium that won a contract design, finance, build and operate Berlin鈥檚 new airport for 50 years. It also recently won a deal to finance, plan, build and operate Germany鈥檚 first toll road for 30 years, The Herren Tunnel in L眉beck.
Hochtief came under pressure from its largest shareholder to improve its profitability last week. The German energy group RWE 鈥� which holds a 56% stake in the contractor 鈥� told a meeting of analysts in London that its core business in the future would be in energy rather than smaller interests such as construction and chemicals.
Analysts predict that Hochtief could be sold off after 2001. But a spokesperson for RWE said: 鈥淲e don鈥檛 have a selling list but every business has to make its contribution and we are not giving long-term guarantees.鈥�
