Construction firm Costain has stepped up its pursuit of struggling outsourcer Mouchel by unveiling a higher takeover proposal.
Maidenhead-based Costain returned with a new all-share offer worth more than £150 million after Mouchel’s board rejected a previous approach in December.
Costain said its offer, which is subject to a number of pre-conditions, was 27.6% higher than its previous approach and would give Mouchel shareholders a 51.7% stake in the enlarged company should a deal go ahead.
Chairman David Allvey said there was compelling strategic rationale for combining the two firms and creating a group with the critical mass to meet demand from customers for larger and longer-term bundled services. He called for a meeting with the board of Mouchel as soon as possible.
The interest comes after Mouchel’s shares hit an all-time low of 56.5p in early December – from a year high of 268p – amid concerns over Government spending cuts and as it holds talks over the refinancing of its debt pile.
Mouchel’s clients include Government agencies and councils across the UK, including Milton Keynes, Middlesbrough and Bath & North East Somerset.
Costain, which is focused on the infrastructure, environment and energy sectors, said a combination with Mouchel would create a company with a combined order book of more than £4 billion.