Shareholders case of “damned if they did, damned if they didn’t”

Balfour Beatty has immediately terminated its merger discussions with Carillion.

Alastair Stewart, analyst at Westhouse Securities, said:

“Balfour Beatty has rejected Carillion’s (CLLN, No Rec) offer for a third time, and will not seek an extension of tomorrow’s Put Up or Shut Up deadline and is continuing to pursue the sale of professional services business Parsons Brinckerhoff. We believe this is likely to weaken the share price in the short-term, but for Balfour Beatty shareholders it was a case of “damned if they did, damned if they didn’t” re-engage in talks and we re-affirm our Sell recommendation.

“Carillion’s yesterday only moderately sweetened its all share offer, by offering 0.8712 new CLLN shares, up 7.5% from the previous 0.8105 and an additional 8.5p cash dividend, which had already been proposed. It would have given Balfour shareholders 58.3% of the combined entity, up from 56.5% and valued BBY at £2027m or 302p a share. The real concern, even if a deal had gone ahead was it is based on CLLN’s share price, which would have been open to execution risk on the deal and a variety of what we see as risks facing both businesses.”