SNC-Lavalin Group Inc. said it’s not for sale after the Financial Post reported that at least two rivals had approached Canada’s largest engineering and construction company to discuss a takeover.
“While SNC-Lavalin does not comment on rumors, I can say that the company is not for sale,” spokesman Louis-Antoine Paquin said in an e-mail. “SNC-Lavalin is not engaged in any discussions of this nature with any companies.”
Spain’s Actividades de Construccion y Servicios SA, one of two possible suitors cited by the Financial Post, isn’t interested in SNC, spokesman Juan Jose Diaz Clavel said by e-mail. The other company in the report, WorleyParsons Ltd. of Australia, didn’t immediately respond to an e-mail message sent after regular business hours there.
SNC rose 2 percent to C$46.51 at the close in Toronto, the highest since Nov. 3. That propelled the shares’ year-to-date gain to 5 percent, outpacing the 4.9 percent decline for a benchmark gauge of Canadian industrial stocks.
“We expect any process to take some time as bidders have to sort through a number of unique issues surrounding the company,” Chris Murray, an AltaCorp Capital analyst, said in a note to clients. “However we do believe a sale could create value for shareholders.”
SNC slumped 13 percent in the past 12 months as the global decline in oil prices weighs on a company already grappling with a federal corruption investigation involving the predecessor of Chief Executive Officer Robert Card. Montreal-based SNC bought oil-services provider Kentz Corp. last year.
The “likelihood of a strategic player taking out the entire company is relatively small,” Maxim Sytchev, a Dundee Securities analyst, wrote in a note to clients. Among the reasons: SNC’s Quebec headquarters would leave local politicians reluctant to approve a takeover, he wrote.
Sytchev rates the stock as buy, the equivalent of Murray’s outperform recommendation.