UK construction major Balfour Beatty rejects third takeover bid by rival Carillion

The UK's biggest infrastructure engineering firm Balfour Beatty has rejected a third takeover offer worth over £2 billion, from construction support services firm Carillion, BBC reported.

The sweetened offer on Tuesday, represented a 36-per cent premium to the recent average price of Balfour shares.

However, according to Balfour, the company's offer failed to address its two key concerns.

Balfour wants to sell its US unit, which Carillion opposes. Meanwhile, according to Balfour, it remained unconvinced that a merger with Carillion would deliver the costs savings suggested by its rival.

Under Carillion's improved offer Balfour shareholders would get to control of 58.268 per cent of the combined company, as against 56.5 per cent under the previous offer.

The revised offer yesterday came ahead of a 5 pm "put up or shut up" deadline on Thursday imposed under Takeover Panel rules.

According to Balfour, it would not be seeking an extension to the deadline. The company added the revised offer came only as a small improvement of £55 million on Carillion's second offer, which was rejected on 11 August.

Carillion's latest offer continued to assert that it would halt the planned sale of Balfour's US business, Parsons Brinckerhoff, which had emerged as a key sticking point to any deal.

According to the Balfour it had considered Carillion's third offer of a bigger slice of the combined company, and after consulting with major shareholders, decided it failed to address two key concerns, The Telegraph reported.

The concerns were the considerable risks associated with the proposed business plan, and the continued intention to halt the sale of Parsons Brinckerhoff at a point when it was reaching a successful conclusion

According to Carillion it needed an extension to the deadline for due diligence to take place within a further four-week time-frame.

Meanwhile, the Carillion continues to run out of time to find a solution to the deadlock. Under the UK's Takeover Panel rules the company is restricted from making another offer for a six-month period, unless it was invited back by Balfour.

The differences over the US consultancy business to be a huge hurdle to the  two companies as Carillion had said it needed Balfour to keep Parsons Brinckerhoff and its stable cashflow to cover the costs of the merger restructuring.