Balfour Beatty Rejects Revised Carillion Merger

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Aug. 11 (Bloomberg) -- Bloomberg’s Matthew Campbell reports on Balfour Beatty’s rejection of a renewed merger proposal from Carillion that would form the U.K.’s biggest builder with a market valuation near $5 billion. He speaks on “The Pulse.”

This is coming back to the same sticking point we had before.

Parsons brinkerhoff, new york-based engineering consultancy, the people you hire when you have some megaproject.

Balfour beatty wants to sell parsons.

Carillion wants parsons to be an integral part of the combined company.

This appears to be a somewhat intractable disagreement.

That's is the stated rationale.

Balfour are saying, if we do manage to sell the consulting business, there is traction, 200 million pounds possibly for payback to investors.

Is that enough?

You were saying they had a pretty rough run.

I was looking at the top line on our story.

How many profit warnings?

Four profit warnings.

They have lost their chief executive.

This is not a country -- a company that can convince the shareholders easily.

This is a troubled company.

Interestingly, shares are up slightly today.

Normally, failed talks, you expect target shares to go down quite sharply.

They have succeeded in diffusing some of that investor angst, at least for today.

Long-term, this is a troubled situation.

Do you think this is the end of the story or will it revive and have their radius forms?

I suspect there is more to come on this one.

Balfour was careful to say they are open to value-creating strategic opportunities, which is just city speak for, we could still reopen this one if we get terms that we can agree with.

What does it take to reopen this?

Where is the value?

One has been battered.

They have a consulting business that delivers in the hard times.

And then you have a beast of construction.

Would it be a good fit?

The strategic rationale is fairly obvious.

You saw among analysts and investors, a very receptive atmosphere to this he'll.

The idea is, carillion is very strong in services.

They do maintenance and that sort of thing for military bases, railway facilities, telecommunications.

Balfour is more heavily oriented toward traditional construction.

The idea is that combining these services makes a lot of sense.

The strategic rationale is there but the companies aren't seeing eye to eye.

You speak about deals all the time.

You have a real sense of what is going on.

If in version is on the cusp of death, how is the climate in the u.k.? are there deals bubbling going into the second half?

What is the feeling on m&a? i think the feeling on m&a is fairly buoyant.

We do have this trend of u.s. companies trying to invert into europe because the political atmosphere in the u.s. may or may not continue.

We have a strongly recovering u.k. economy.

We have perhaps the housing sector also in strong recovery.

All cylinders of this country's economy seem to be firing.

Traditionally, that correlates with deals.

All we need is corporate confidence and that appears to be coming.

Things for that roundup on the balfour beatty story.

Let's cross to south africa's central bank.

A rescue plan for african bank investments.

The company has to raise more than $900 million in capital and break off a so-called bad bank with bad loans.

Here for more on the news is remy.

How quickly did this whole debacle come to light?

It was last week, wednesday, that we first saw a trading update from african bank.

That sent stocks into freefall.

They said they would need at least 8.5 billion to keep them capitalize.

The market it and seem to

This text has been automatically generated. It may not be 100% accurate.

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