Carillion shares leap 20 per cent on takeover reports

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Carillion is set to reveal further trading details on Friday (Source: Getty)

Shares in Carillion leapt almost 20 per cent this morning on reports a Middle Eastern suitor was preparing a takeover offer for the ailing builder.

Yesterday evening City A.M. revealed a new bidder was readying a deal with particular interest in the firm's prized London listing.

The bidder is preparing a letter of interest to submit to Carillion and its advisers EY. But it is waiting for further trading details due to be released on Friday before committing to the bid.

Revealed: Carillion suitor sets sights on prized London listing

The latest bid is unrelated to reports of ongoing talks between Carillion and a number of Middle Eastern construction firms over the sale of part of its overseas operations.

Carillion’s auditors KPMG are wading through its books ahead of a delayed half-year profits announcement on Friday.

Problems with Carillion’s contracts prompted the firm to reveal an £845m writedown in July, sending its shares into freefall. Investors have seen 75 per cent wiped off the value of their stock since the announcement. Carillion subsequently crashed out of the FTSE 250 in August.

Such writedowns relate to three-quarters of Carillion’s contracts. Concerns remain that if KPMG were to unearth similar problems in the remaining contracts, it could be terminal for the company.

However, many City analysts are reserving judgement on Carillion until Friday’s announcement. Some are pinning their hopes that the construction firm, with £5bn of annual revenues, is too big to fail and that the government depends on it to deliver a number of key infrastructure contracts.

Read more: BT's Openreach checks £1.5bn Carillion deal

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