Mouchel falls after bids fail

Marion Dakers
SHARES in road maintenance group Mouchel dropped further yesterday after both Costain and Interserve walked away from their takeover offers, amid uncertainty about the company’s future.

Mouchel’s shares have tumbled more than 40 per cent since rejecting a string of bids at the end of March, and yesterday analysts downgraded their forecasts.

Numis analyst Francesca Raleigh cut pre-tax profit forecasts by nine per cent, adding that “an unsuccessful outturn following 13 months of various bid approaches could potentially lead to an investor backlash against the board, leading to board changes”.

Chief executive Richard Cuthbert has been with the firm since 2002.

Other analysts said the board is mostly made up of new members following a reshuffle in 2010, and that support for the firm’s tough stance on takeover interest suggests that shareholders will back the board.

Some investors in Mouchel, including Schroders, which holds a fifth of the firm’s shares, have also voiced concerns about the company’s ability to improve financially.

The firm last week reported a pre-tax loss of £1.53m after several profit warnings.

Costain, however, has been applauded for walking away from the takeover, though its shares also dropped yesterday.

Andy Brown at Panmure said: “[Costain’s] strategic aims will now be met by smaller moves, which is likely to be better received by investors.”

Mouchel shares closed down 4.5 per cent at 78p, well below Costain’s final offer price of 153.2p per share, while Costain shares lost 5.4 per cent to close at 247.8p yesterday.