Bidding war over Scott Wilson
By Chris Sleight29 June 2010
US-based consultant engineer CH2M Hill has announced a UK£ 189 million (US$ 282 million) takeover offer for Scott Wilson. Earlier in the week the UK-based consultant had recommended a UK£ 161 million (US$ 240 million) takeover offer from URS Corporation to its shareholders.
Like the URS bid, CH2M Hill's proposal is an all cash offer, and it represents a +105% premium on Scott Wilson's closing share price on Friday 25 June, the last business day before URS announced its bid.
The day before announcing its bid, CH2M Hill acquired just under 13% of Scott Wilson's share capital at the offer price of UK£ 2.45 (US$ 3.55) per share. It has also received irrevocable undertakings to accept the offer from two institutional shareholders - Artemis and Aviva, which control a further 5% of Scott Wilson.
A statement from URS said the company was considering whether to match or better CH2M Hill's offer. However, the vague nature of this statement has earned it a rebuke from the UK's Takeover Panel, which says its rules clearly state that companies cannot make ambiguous statements like this, but must commit to a specific improved offer.
URS has been given until 5.00 pm on 30 June to improve its offer by the Takeover Panel. If it does not, Scott Wilson has reserved the right to withdraw its approval of the URS offer.
Commenting on the offer, CH2M Hill chairman lee McIntire said, "The offer we have announced today is superior to the offer announced this morning for Scott Wilson both in terms of value and the opportunities it will deliver to Scott Wilson, its business, customers and employees. C2HM Hill has a demonstrable track record of supporting and developing the businesses we acquire."
Scott Wilson has more than 5500 employees and offices in 80 locations around the world. Its key regional branches are in the UK, Hong Kong, New Delhi, Warsaw, Bahrain and Dubai. Last year it had revenues of UK£ 240 million (US$ 507 million) and a net profit of UK£ 13.6 million (US$ 20.3 million). Some 72% of the company's revenues last year were generated in the UK.