Contractor issues statement following announcement of 拢178m Costain merger proposal

Contractor Kier is considering whether to table a rival offer to buy May Gurney following the announcement this morning that the support services firm has agreed a merger with contractor Costain.

Kier has issued a statement saying it 鈥渉olds May Gurney in high regard鈥� and that a merger with Kier would 鈥渃reate significant value for shareholders, establishing a market-leading and well-balanced business.鈥�

The contractor said it was 鈥渃onsidering its options鈥� in the light of Costain鈥檚 announcement this morning.  However it added there was 鈥渘o certainty鈥� that an offer will be made.

May Gurney鈥檚 share price, which had already risen by more than 20% on the news of the proposed deal with Costain, jumped by another 10% upon news of Kier鈥檚 announcement.

Costain said this morning that it hopes its proposed merger, for which it has secured the agreement of May Gurney鈥檚 board, would be able to be completed by early June.

However, a potential  Kier offer raises the prospect of a bidding war which may delay the timetable and increase the price.

Kier鈥檚 statement said:

鈥淜ier Group plc (鈥淜ier鈥�) notes the announcement regarding the proposed merger of May Gurney Integrated Services PLC (鈥淢ay Gurney鈥�) with Costain Group PLC.

鈥淜ier holds May Gurney in high regard and views it as a good quality support services business with a range of services which complements Kier鈥檚 existing offering. Kier believes that a combination of Kier and May Gurney would create significant value for shareholders, establishing a market-leading and well-balanced business. The enlarged group would offer an unrivalled range of services to Local Authorities as well as providing Kier with greater access to the regulated sector.

鈥淭o that end, Kier has made previous attempts to discuss a potential combination with May Gurney and has been monitoring the business鈥� recent performance. In light of the announcement, Kier is considering its options.

鈥淎 further announcement will be made if and when appropriate. There can be no certainty that an offer will be made.鈥�

 

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