Construction firm Kier digging towards deal for Mouchel takeover

 
Caitlin Morrison
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Haydn Mursell will be the new chief of the group
CONSTRUCTION firm Kier Group has moved one step closer to purchasing infrastructure company Mouchel.

Kier announced yesterday that it had raised around £312m in a rights issue, selling over 39.6m new shares at 858p each, representing approximately 91.65 per cent of the shares issued during the process.

It also said that the Mouchel acquisition is expected to complete on 8 June.

The company revealed in April that it had entered into a conditional agreement to buy Mouchel, which controls around one third of the UK’s road network.

Kier said it would raise the funds for the deal through a £340m rights issue.

Following completion of the rights issue, joint bookrunners JP Morgan and Numis, acting in their capacity as underwriters for the arrangement, procured subscribers for the 3.3m new shares not taken up during that process in a rump placing.

The remaining 8.35 per cent of the shares on offer were bought at a price of 1,340p per share.

At the time that the deal was originally announced, Kier said the proceeds of the rights issue would also be used to repay Mouchel’s net debt.

The Mouchel deal will create a new enlarged group with a combined order book of £9.3bn, made up of Kier’s order book of £6.5bn and Mouchel’s order book of £2.8bn.

Kier expects to deliver £10m in annual cost savings, including £4.4m a year in corporate savings from reducing Mouchel’s board.

Integrating the two businesses to create a £3.6bn turnover business will cost an estimated £17m.

On completion of the transaction, Haydn Mursell will become chief executive of the combined group.

Kier shares rose 1.7 per cent on the news, to close at 1,384p.