锘緼 major bout of consolidation is under way, marked by a shrinking band of suppliers and a growing list of casualties. Alastair Stewart looks at the players in a game of musical chairs
锘緼 giant game of corporate musical chairs was unfolding across the UK and Europe over the festive season involving, among others, Costain鈥檚 bid for Mouchel, and Spanish giant ACS closing in on Germany鈥檚 Hochtief. The music hasn鈥檛 stopped yet in the industry鈥檚 latest bout of attempted consolidation, but when it does there could be fewer - but bigger - players left.
The latest flurry involves a variety of motives: going up the 鈥渧alue chain鈥� to clients and down toward users; bulking up core strengths; or broadening geographic reach.
Costain went public on its approach for the consultancy and infrastructure maintenance group just before Christmas. It has now made two (rejected) bids for Mouchel and there are predictions it will soon make a third.
The move is the latest in a convoluted saga for Mouchel. A year ago it fended off a 250p per share approach by shipbuilder-turned-outsourcer VT. This was raised to 294p but was withdrawn when Babcock International bid successfully for VT. Mouchel, with net debt standing most recently at 拢83m, subsequently warned that full-year profits.
Costain argues that the proposed merger fits with its 2009 strategy 鈥淐hoosing Costain鈥�, in which consultancy and support services would take up more of the output of the group, seen once as primarily a contractor.
A similarly uninvited approach, albeit on a larger and international scale, was meanwhile under way between ACS and Hochtief, which operates several PFI