Mouchel has confirmed its is locked in talks over a possible takeover from a "preferred bidder", believed to be Costain.
The business services group said in a statement to the stock market: “The Board is pleased to confirm that it is now in advanced discussions with one potential offeror and has signed a co-operation agreement with that preferred trade purchaser (the “Preferred Possible Offeror”) in relation to a potential offer being made for the Company.”
Mouchel revealed last month that it had received a number of approaches for the business.
It is understood that it has rejected three offers from Costain as the board held out for a better price. Mouchel values the firm at around £175m.
Mouchel added: “Although the board of Mouchel considers that the company has a strong future as an independent business, it believes that the strategic logic of a combination of Mouchel and the Preferred Possible Offeror would provide the best option to deliver value to shareholders.
“The making of any offer by the Preferred Possible Offeror remains subject to a number of pre-conditions, including the satisfactory completion of mutual confirmatory due diligence and the arrangement of financing which is likely to take a number of weeks.”
City A.M. Reporter