Costain withdraws May Gurney bid
26 April 2013
Costain has withdrawn its all-share bid to acquire fellow UK contractor May Gurney. The move came after Kier, a larger UK construction company, made a cash and shares offer to acquire May Gurney, following Costain’s initial takeover offer.
A statement from Costain said it would not be increasing its offer for May Gurney, leaving the way open for Kier to close the deal. “Having undertaken several months of detailed due diligence, it does not believe that it would be in the best interests of Costain shareholders for Costain to amend the terms of its proposed merger with May Gurney,” said the statement.
Under the terms of the original merger offer from Costain, May Gurney shareholders would have received 0.8275 new Costain shares for every May Gurney share they held. This would have given May Gurney shareholders a 47% stake in the new corporate entity.
However, Kier’s offer was for 0.2085 new Kier shares and UK£ 0.50 (€ 0.59) in cash for each May Gurney share, valuing the company at £221 million (€259 million) – 35% higher than Costain’s offer.