May Gurney at center of a bidding war

Kier has announced that it is interested in acquiring May Gurney following news that Costain will merge with the company. Our reporter Marion Dakers on the Costain deal:

Engineering group Costain has agreed to merge with Aim-listed May Gurney, in the latest round of consolidation in the support services industry.

FTSE-listed Costain said last night that its investors will hold 53 per cent of the combined company, and it will give May Gurney investors 0.8275 new shares per existing share.

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Kier's announcement:

Kier holds May Gurney in high regard and views it as a good quality support services business with a range of services which complements Kier’s existing offering. Kier believes that a combination of Kier and May Gurney would create significant value for shareholders, establishing a market-leading and well-balanced business. The enlarged group would offer an unrivalled range of services to Local Authorities as well as providing Kier with greater access to the regulated sector.

To that end, Kier has made previous attempts to discuss a potential combination with May Gurney and has been monitoring the business’ recent performance. In light of the announcement, Kier is considering its options.