Water and Effluent Treatment Magazine
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SEPTEMBER 2014 WET NEWS 3 C arillion has ended its chase for Balfour Beatty. The company gave up af- ter Balfour rejected its third merger proposal on the day be- fore Carillion had to "put up or shut up" (PUSU). Under stock market rules apart from in exceptional cir- cumstances, Carillion is prohib- ited from trying again for six months. Brokers had not expected Carillion to announce another o er before the deadline, and sources said it did not have the - repower to go hostile. Carillion's "improved" merger proposal would have secured Balfour shareholders 58.3% of the combined entity, compared with 56.5% under the previous o er on August 11. The board of Carillion said it continued to believe in "the pow- erful strategic logic" of a merger and the huge cost savings that would ensue but Balfour Beatty higlighted two key issues in its rejection announcement. One was the "considerable risks associated with D rainage specialist Lanes Group has increased its o - road jet vac capability to counter risks associated with ex- treme weather events. The Lanes Utilities hub in Sta ord operates the all-terrain jet vac units that can be quickly made available nationwide. Clients already using the equipment include utility provid- ers, farmers, concerned about ' ooding damaging crops, ground- Carillion gives up pursuit of merger with Balfour Beatty " Carillion had been trying to court Balfour Beatty in recent weeks as it sought a possible merger between the two groups. Lanes adds o -road capability works and construction compa- nies and transport providers. Lanes Group sales director Richard Leigh said: "The o -road jet vacs are in regular use for our wastewater contract work with Severn Trent Water. "Utility companies and land owners, including farmers, are becoming increasingly aware of the importance of keeping drain- age systems in good condition. Weather forecasters are warning that the UK will experience more regular extreme weather events, increasing the risk of ' ooding, with damage to agricultural land of signi- cant concern." Two di erent o -road jet vac units are available. Sulzer Pumps Wastewater UK Ltd 5th Floor Astral Towers Crawley West Sussex Tel: 01293 558169 Sulzerinnovation@sulzer.com www.sulzer.com Explore the full range of premium efficiency wastewater products. From the ABS submersible sewage pump XFP offering world-class energy savings to the world's most compact and energy efficient direct driven ABS HST20 High Speed Turbocompressor. Revolutionary energy saving in all key applications. Explore our World Sulzer Advert concepts V4_Layout 1 06/03/2014 16:55 Page 2 the proposed business plan, including the strategy to signi- - cantly reduce the scale of the UK construction business when it was poised to bene- t from a recovery in the market". The other was Carillion's con- tinued intention to terminate the sale of Parsons Brinckerho at a point when it was reaching a suc- cessful conclusion. Balfour Beatty said that Caril- lion's revised proposal had repre- sented just a small value change in the terms compared with the proposal it rejected form Carillon on August 11 and it added that it would not be seeking an exten- sion to the PUSU deadline. Balfour Beatty said the group's priorities were now to conclude the Parsons Brincker- ho sale process at an attractive value, recruiting a group chief executive, restoring value from the UK construction business, realising further savings and shared service e˜ ciencies and publishing the updated valua- tion of the public public-private partnership portfolio to take account of current market conditions. News of "preliminary" talks between Carillion and Balfour Beatty - rst leaked in July prompt- ing a formal announcement of a possible £3.05B merger on July 24. Balfour Beatty's water opera- tions cover the entire lifecycle of networks, including clean and waste water mains, metering, treatment facilities and other essential infrastructure. Carillion's water expertise is in network repair and mainte- nance, strategic pipelines, distri- bution mains and ' ooding works. NEED TO KNOW A merger between the two groups would have created a £3B organisation Balfour Beatty is said to be in advanced talks with WSP over the sale of Parsons Brinckerho‚ Talks between the two companies broke down in July, shortly after it became public Parsons Brinckerho‚ is one of Balfour Beatty's few pro† table units The jet vac units, towed by a farm tractor, are 'proving invaluable' for cleaning and repairing pipelines across agricultural land WET News is registered at Stationers' Hall. Origination by Faversham House Group, and PH'Media, Roche, Cornwall. Printed by Buxton Press, Palace Road, Buxton, Derbyshire, SK17 6AE. Copyright 2014. Faversham House. No part of this publication may be reproduced without prior written permission from the publishers. Every e‚ ort is made to ensure the accuracy of material published in WET News. However, Faversham House will not be liable for any inaccuracies. The views expressed by contributors are not necessarily those of the editor or publishers. Text paper is printed on PEFC accredited paper. For more info see www.PEFC.org. License number PEFC/16-33-141. Technical articles of full page, or more appearing in this journal are indexed by British Technical Index. Editor Maureen Gaines: maureen.gaines@fav-house.com Production editor Mike Smith: mike.smith@fav-house.com Ad sales Deborah Lilley: deborah. lilley@fav-house.com Classifi ed sales Danielle Wood: danielle.wood @fav-house.com Team administrator Clare Klos: clare.klos @fav-house.com Production controller Sharon Miller: sharon.miller@fav-house.com Publisher Angela Himus: angela. himus@fav-house.com Published by Faversham House Ltd, Faversham House, Windsor Court, Wood Street, East Grinstead, West Sussex, RH19 1UZ Call: 01342 332000 Publisher's note: This issue includes editorial photographs provided and paid for by suppliers. 1yr: UK £99 Overseas (airmail) £113/$198 2yr: UK £171 Overseas (airmail) £199/$349 Call: 020 8955 7045 Email: fhcustomerservices@ abacusmedia.com SUBSCRIPTIONS: ONLINE: Search WET News' archives for more jobs, news, features, products and services, events and training courses. www. wwtonline.co.uk WET NEWS Average circulation Jan-Dec 2013: 6,110 YOU WHAT? Balfour Beatty and Carillion – what was said? "The board of Carillion is con† dent that, as a direct result of the merger, the cost-base of the combined group could be reduced by at least £175M per annum by the end of 2016 and that earnings would consequently be signi† cantly enhanced from that year. These cost savings would represent a capitalised value of over £1.5B before any re-rating" Carillion board "Several key business plan assumptions suggest an analysis based on the integration of businesses smaller than Carillion's, rather than one that is substantially larger" Balfour Beatty board "The synergy prize is too big to walk away from, with Carillion confident of achieving at least £175M. We believe final synergies could be higher – perhaps £250M. Egos aside, this deal should happen" Joe Brent, Liberum "In our view, Carillion's merger looks compelling and far more attractive than relying on a management team at Balfour Beatty that has presided over shareholder value destruction in the past few years" Andrew Gibb, Investec.