Marshall Plan needs more than a cash boost – Bottom Line
ANTHONY Gutman, the Goldman Sachs banker, is something of a high-flyer. Having worked on several of the biggest deals of 2014, his summer job has been to advise Balfour Beatty over the proposed merger with Carillion.
This may have been an intriguing situation to manage at first, back when the chairmen of the two construction rivals were holding clandestine meetings in plush West End locations. Yet in recent weeks I cannot help but suspect that it’s been a somewhat boringly simple task.
Ever since relations between the firms soured at the end of July, Balfour’s tactic has been reminiscent of Margaret Thatcher’s famous response in 1990 to a plan (as she saw it) to impose an EU super-state on Britain. “No, no, no,” she said. Which is pretty much the sum of Balfour’s three responses to Carillion.
The fall-out between Balfour’s exec chairman Steve Marshall and Carillion’s Philip Green revolved around plans for US arm Parsons Brinkerhoff, which will now be sold.
It is a ripe time for a sell-off, which could bring in £750m. On top of this, Balfour will publish a re-evaluation of its public-private portfolio in the coming weeks, providing a much-needed boost to its asset value.
These factors should help Marshall. And bringing in an impressive-looking executive team will also buy him some time. Yet before long we will discover if his obdurate rebuttal of Carillion was based on sound business judgement, or merely a personal clash with Green and co. As the late Baroness Thatcher’s own career showed, blunt stubbornness can be great for getting to the top – but it can also come back to haunt you.