Kier launches rival bid for May Gurney

Kier and Costain are now going head to head to acquire May Gurney, which itself is seeking to adjourn a shareholder vote on the Costain offer due to take place on 7 May.

A spokesperson from May Gurney said the 7 May meeting was still on the cards since Kier has been unable to obtain irrevocable shareholder approval for its rival offer. A date for a vote on the Kier offer has not yet been set, but Kier said that May Gurney directors intended to recommend unanimously that its shareholders vote in favour of the scheme.

For its part, Costain said it was considering its position and would make a further announcement in due course.

Under Kier’s rival offer, May Gurney shareholders would own 27% of the enlarged group once new shares have been issued.

Kier calculates that its bid of 315p (€2.68) per May Gurney share represents a premium of 71% on the price of May Gurney shares on 25 March – the date that Costain launched its bid, and is 35% higher than Costain's as of 23 April.

Kier added that it believed the combined companies could achieve annual pre-tax synergies of approximately £20 million (€17.4 million), primarily through savings from the consolidation of corporate and shared services. It said Kier CEO Paul Sheffield would lead the merged group, with Kier chairman Phil White becoming the chairman of both companies.

"Attractive combination"

Baroness Margaret Ford, chairman of May Gurney, said the offer represented a “compelling transaction” for shareholders.

“It offers a highly attractive combination of a significant premium, a cash element and, through the scale and strategic fit of the enlarged group, allows May Gurney Shareholders to share in the growth of one of the UK's leading integrated services and construction companies," Baroness Ford said.