Balfour Beatty’s share price has risen over five per cent in early morning trading, after John Laing Infrastructure Fund (JLIF) confirmed plans to make a £1bn offer for its investment arm.
Following reports suggesting John Laing was eyeing Balfour’s portfolio of public-private partnership assets, the City fund moved to confirm its offer this morning.
John Laing says it will seek to finance the acquisition of the portfolio, said to include contracts for roads, hospitals and student accommodation contracts in the UK, by way of an equity capital raise of ordinary shares.
Balfour Beatty itself has valued the portfolio at just over £1bn.
This morning’s uptick in Balfour’s share price follows a steady rise after big drops earlier in the year. The company has endured three profit warnings since May.
John Laing’s bid could lead to the further dismantling of the construction company, which sold off its design consultancy arm Parsons Brinckerhoff for £820m to Canadian group WSP Global as well shortly after its sale of a £61.5m stake in Pinderfields and Pontefract Hospital.
JLIF today commented:
Further to recent press speculation, JLIF confirms that today it is making a non-binding proposal, subject to due diligence, to the board of Balfour Beatty for its PPP Portfolio for approximately £1bn in cash.Since its IPO in 2010, JLIF has proven itself as a leading London-listed infrastructure fund investing in low risk, operational infrastructure assets and therefore believes it would be an ideal owner of the Portfolio.Following due diligence and in the event agreement is reached to purchase the portfolio, JLIF would seek to finance the acquisition largely via an equity capital raise of ordinary shares, as with its previous acquisitions. A further announcement will be made when appropriate.