Balfour Beatty Rejects Second Merger Offer
Balfour Beatty has rejected a £3bn merger deal with rival Carillion for the second time.
The British infrastructure company said a tie-up would pose significant risks to its business.
The revised proposals from Carillion follow a difficult period for the Balfour Beatty, which in the last 18 months has issued a series of profit warnings.
Its most recent warning came in July as the company blamed a deterioration in the performance of its UK construction business, but insisted that its balance sheet remained in good shape.
Earlier this year, loss-making Balfour also lost its chief executive.
Turning down an offer for the second time, the executive chairman said there was no strategic logic to a deal other than to boost the combined group's earnings.
Steve Marshall said: "In our board's judgement, it wasn't a credible proposal that was going to fix all the risks for Balfour Beatty shareholders."
It comes as the company is trying to sell off US consultancy Parsons Brinckerhoff.
Balfour Beatty voiced concerns that any deal with Carillion could threaten the sale of the business.
It said: "If bidders were not prepared to carry on and if the merger then didn't go through, Balfour Beatty is basically left with a failed merger transaction and damage to Parsons Brinckerhoff."
Balfour Beatty acquired Parsons Brinckerhoff for £636m in 2009 but wants to shed the business as it says it has failed to deliver significant benefits.
With the latest rejection, Carillion has said it is considering its position.
Balfour's shares were up by more than 2% in afternoon trading.