Anybody trading in these shares? I just bought some @ 204.72

So glad I took a small profit a few weeks ago. Figures don't look that bad to me, but obviously the market isn't impressed.

EDIT: Just seen the £35m shortfall!

Stopped out on my last trade - contract win after contract win - one day I'll get my head around this lot!

Nothing in the Forward Diary so this came as a surprise :-(

Mirabaud note today:
"The market fears worse to come. After the downgrades to 2015 and beyond, BBY will be left trading on a low teens multiple of earnings and a yield of around 6.5%. Actually it won’t be trading on a yield of 6.5%; it will more likely be trading on a yield of something between zero and 3.25%, because no new CEO is going to accept the constraint of a poorly covered dividend that absorbs a major slice of cash flow as they attempt to turn around a struggling low margin, cyclical business.

We expect the share register will be witnessing a bit of fluidity currently, since income funds will not be relishing the upcoming dividend risk. Quite where they go is another matter, since Balfour Beatty was one of the last big yields left out there. But if your income holders depart, by definition you are left with an investor base that is there for the capital gain.

Currently Balfour Beatty is marketing their US Professional Services business for sale, with price tags of up to $1bn being talked of. The PPP portfolio is clearly liquid, since disposal proceeds and achieved prices are surprising on the upside. So much of BBY is currently being turned into cash, or is capable of doing so, at premium valuations.

The last Directors Valuation of the PPP portfolio was £766m, after realising disposal gains in 2013 of £82m. We know that disposal gains of at least £35m have been achieved this year already, from today’s statement, so the minimum value of the portfolio, including disposal proceeds is going to be £800m, and it is not too much of a stretch to get to a billion.

So add up the value of US Professional Services, the PPP portfolio and subtract £420m of net debt and you end up with a net cash position, if all those bits are sold of around £1.2bn, and the market cap is £1.4bn. But of course, that still leaves you with Construction Services, which used to make well over a hundred million, plus the UK Professional Services, plus the Gammon JV in Hong Kong.

Unless there is something very rotten at the core of the Construction Services business, then it looks to be deeply undervalued on a SOTP basis within Balfour Beatty. Corporate activity has to be a real possibility, not least because the group will be talking to lots of construction and engineering M&A bankers and competitors currently as part of the US divisional sale process.

Margins are clearly depressed and Balfour appears to be a potential recovery story with a useful M&A fillip potentially in there for nothing. By converting assets into cash Balfour can buy itself time and give it the flexibility to make the changes to its business that it needs. Other names in UK construction are already faring better, and we note with interest Carillion’s apparently successful restructuring of their own UK construction business and wonder how much can be read across to Balfour.

Shareholders must surely have had enough by now, so if anyone wants to have a go, they are unlikely to find a hostile reception. The Board must know that their only defence is a rapid recovery; the question is, will they be allowed time to effect one?"

If you like a risk and think Balfour Beatty shares have hit bottom, now is the time to buy, Danny Fortson wrote in The Sunday Times. Shares in the construction company have fallen by a third since March as it has published two public warnings since its annual results. The latest came on July 3rd when Balfour revealed problems at its engineering services arm. Most of its troublesome over-budget contracts run out soon and it is a big, diversified company. Things could get worse but the company is also vulnerable to a takeover with rumours of private equity interest. If investors are feeling lucky they may want to have a go, Fortson said.

Nice Div of £ 290.75 for me on the 4th

BALFOUR BEATTY JOINT VENTURE WINS HK$3.91 BILLION (£300 MILLION) BUILDING CONTRACTS IN HONG KONG

Balfour Beatty, the international infrastructure group, announces today that its Hong Kong based joint venture Gammon Construction has won two building contracts with a combined value of HK$3.91 billion (£300 million).

Gammon Construction, a 50/50 joint venture with Jardine Matheson, has been awarded a HK$2.82 billion (£216 million) contract by the Hong Kong Housing Authority for a public rental housing development in Tuen Mun in the New Territories, which will provide approximately 4,600 flats in 33 to 38 storey towers and other community facilities. The project will be completed by 2016/2017. To counter a shortfall in housing, the Hong Kong government is aiming to provide 470,000 units over the next decade with public housing accounting for 60% of this growth.

The second contract, valued at HK$1.09 billion (£84 million), follows Gammon's previous work for Hong Kong Science Park Phases 3a and 3b. The new Phase 3c involves constructing two research and development offices and laboratory-enabled buildings. The project will meet the stringent Hong Kong Building Environmental Assessment Method (HK-BEAM) Plus Platinum standard, and will be completed by the end of 2015.

Balfour Beatty Executive Chairman Steve Marshall said: "These projects build on an already strong order book in Hong Kong and there is potential for more opportunities as the demand for housing and sustainable buildings continues. With a solid track record in delivering these construction projects, our project teams are also committed to realising our vision regarding safety, quality and environmental performance.

StockMarketWire.com
Balfour Beatty has been awarded a £129m contract to upgrade a 13 mile stretch of the M3 through Hampshire and Surrey to a 'smart motorway'.

The upgrade, for the UK Government's Highways Agency, will increase capacity, reduce congestion and shorten journey times for the 120,000 motorists who pass through this part of the network every day.

StockMarketWire.com
Balfour Beatty has been awarded a $136m contract to build a prestigious and environmentally responsible office complex in the heart of uptown Charlotte, North Carolina - the latest in a series of awards to develop the city's economic and commercial infrastructure.

The building, known as 300 South Tryon, is being developed by Cornerstone Real Estate Advisers LLC and consists of a distinctive 25-storey office building and a four level underground parking garage.

The office building is being planned to achieve Leadership in Energy and Environmental Design (LEED) Gold certification. LEED is the internationally-recognised green building certification system established by the US Green Building Council, which promotes sustainable building and practices.

Developing LEED solutions is a key strategic component of Balfour Beatty's US construction strategy in response to clients' demands for more environmentally-friendly buildings.

Balfour Beatty has won a number of significant contracts to develop Charlotte's infrastructure in support of its economic growth. Earlier in 2014, the City of Charlotte awarded Balfour Beatty a US $131 million rail contract to build track and systems components to extend the city's light rail system. This award followed a US $106 million civil engineering contract for the same light rail system. Balfour Beatty has also constructed a number of high profile buildings in the area including the global headquarters of specialist manufacturers SPX, the 32 storey 1 Bank of America Center, and the University of North Carolina at Charlotte Student Union building.

Thanks Harry - I totally missed the news (I don't hold these atm!!)

Nor do I sadly, though I do have CLLN.

Unfortunately I recently sold my CLLN to buy into PHNX.

Why the drop? Has the merger talks fallen through?

Thanks sk. Merger talks are off.

Well not often I get it right. Bought on the profit warning drop, sold on the merger announcement. Back in again today...

Several pieces in the Sunday Times - evidently the merger/takeover is still very much alive with or without Parsons Brink etc which has 4 possible buyers. Still some upside to the bby share price, up to £3 mentioned.

Cazenove note:
"Balfour Beatty–Carillion merger talks have been terminated. Carillion is yet to issue a statement, but Balfour Beatty is attributing the termination to a ‘wholly unexpected decision’ from Carillion to proceed only if Parsons Brinkerhoff remained part of the combined group. We struggle slightly to rationalise why this might be, given that we see few, if any, synergies between PB and Carillion. However, from our conversations with Balfour Beatty today, our understanding is that detailed due diligence work had not yet started, suggesting that finding out exactly what is in Balfour Beatty’s books is not the reason for Carillion’s decision.
From a Balfour Beatty perspective, we see how it would be difficult now to justify keeping Parsons Brinkerhoff as part of a combined group; management has spent the last few months explaining why there are no real revenue or cost synergies with the rest of the group and bringing Parsons Brinkerhoff into a combined Carillion entity certainly would not offer anything new.
We believe Carillion management are likely to be highly sensitive to the risk of another acquisition that is shortly followed by write-downs, particularly given the recent series of Balfour Beatty profit warnings. However, given that due diligence had reportedly not started, we are not reading any new negative into Balfour Beatty’s earnings outlook."

StockMarketWire.com
Balfour Beatty has set out the reasons for rejecting the merger proposals put forward by Carillion but says it remains open to 'strategic value creating opportunities across the group'.

A statement says that Carillion initially approached Balfour Beatty on 27 May 2014 with a nil premium merger proposal. Based on closing share prices on this date the implied ownership split would have been 51% of the combined entity to Balfour Beatty shareholders and 49% to Carillion shareholders. Following successive negotiations with Carillion over several weeks Balfour Beatty agreed to engage with Carillion at the end of June on the basis of the following key terms:

· All-share combination with 56.5% undiluted ordinary equity to Balfour Beatty shareholders; 43.5% to Carillion shareholders. Respective percentage shares fixed with no variation with any share price movement

· Confirmation from Carillion that they were supportive of the Parsons Brinckerhoff disposal process and in the event of a leak, a joint leak announcement would be released including a public statement of support for the sale process from Carillion, subject to achieving acceptable value and terms for this business

· At Carillion's request, the equity split was predicated on Balfour Beatty retaining the proceeds from the sale of Parsons Brinckerhoff as freely available cash · Balfour Beatty would nominate three non-executive director positions in a total board of 10. Steve Marshall would be Deputy Chairman while the Chairman, CEO and CFO roles would be appointed by Carillion. In addition, it was agreed between Balfour Beatty and Carillion that a possible offer announcement would be made under Rule 2.4 of the Code prior to the start of more detailed due diligence. This announcement would include a pre-condition related to a minimum level of synergies required to be identified for the merger to proceed. The synergy level was to be quantified through joint work teams and in due course validated, and reported on, by reporting accountants. The transaction would then be subject to mutual due diligence including agreeing an acceptable business plan and achievable delivery of synergies. Following the agreement of the terms of engagement above, discussions between Balfour Beatty and Carillion continued until the meeting on 30 July when it was first communicated to Balfour Beatty that Carillion wished to change the terms so as to retain the Parsons Brinckerhoff business.

This followed the joint leak announcement on 24 July and the presentation by Philip Green, Chairman of Carillion, and Richard Howson, CEO of Carillion, to the Board of Balfour Beatty on 28 July where the terms were reaffirmed. Following the meeting on 30 July, Balfour Beatty announced that discussions had been terminated on 31 July on the basis of a fundamental concern regarding the proposed treatment of Parsons Brinckerhoff.

More: http://www.moneyam.com/action/news/showArticle?id=4865985

StockMarketWire.com
International infrastructure group Balfour Beatty posts underlying pre-tax profits of £22m for the first half ended 27 June - down from £47m a year ago.

Revenues fell by 2% to £4,851m and underlying operating profits dropped to £37m from £54m last time.

On a reported basis, the group made a pre-tax profit of £1m against a loss of £4m a year ago and an operating profits of £16m compared with £3m last time.

Executive chairman Steve Marshall said: "Balfour Beatty's key priorities are clear; the Group is being simplified and refocused. The process for recruiting a new Group CEO is well under way.

"The Parsons Brinckerhoff sale process has remained competitive, and is also now well advanced. Our first-half trading and financial performance is in line with our most recent trading update.

"Whilst our first-half performance has been significantly impacted by recent UK Engineering Services contract write-downs, the other parts of the Group have continued to perform well. The Investments business has again demonstrated its significant value to the Group."

Statement by the Board of Balfour Beatty plc
The Board of Balfour Beatty notes the announcement made by Carillion plc ('Carillion') this morning.

The statement from Carillion elaborates on the previous proposal which was rejected by the Board of Balfour Beatty, as announced on 11 August 2014, as not in shareholders' best interests. Balfour Beatty will make a further more detailed announcement in due course.

Today's announcement from Carillion does not address the significant risks set out in Balfour Beatty's announcement on 11 August. In particular:

• To benchmark a series of theoretical cost reduction opportunities, represent them all as synergies, and further, to represent them as incremental value creation directly arising from the merger proposal is incorrect.
• Several key business plan assumptions suggest an analysis based on the integration of businesses smaller than Carillion's, rather than one that is substantially larger. In particular, the substantial rescaling - possibly by up to two thirds - in the revenue of Balfour Beatty's UK construction business would eliminate future earnings recovery potential. It would also incur cash outflows of many hundreds of millions of pounds of restructuring costs and working capital.
• As a result, the Board of Balfour Beatty has serious reservations as to the achievability of the stated synergy number and believes that it creates unacceptable operational and financial risks. In contrast, Balfour Beatty has clear plans for developing rather than partially eliminating the UK Construction Services business, including achieving future cost savings where 100% of the benefits achieved would accrue to Balfour Beatty shareholders.
• Carillion continue to require Parsons Brinckerhoff to remain part of the potential combined business, without providing any strategic or value related logic for its retention, other than for financial presentation purposes. Balfour Beatty has been clear that Parsons Brinckerhoff has not provided synergistic benefits for the Group over five years of ownership, and this has not been disputed by Carillion. Their proposed approach would result in the likely termination of the Parsons Brinckerhoff sales process. This risks damage to that business, as well as eroding its competitive position, and potentially resulting in a loss of value to our shareholders.

The principal objective of the Board of Balfour Beatty is to restore value to its shareholders. The Board is confident that pursuing its strong independent strategy based around a recovering UK business, growing US market and significant investments business is more attractive than a merger on the terms proposed by Carillion with its associated execution risks and potential value loss from a terminated Parsons Brinckerhoff sale. As already indicated, the Board remains open to strategic value creating opportunities across the Group.

There can be no certainty that an offer will be made by Carillion for Balfour Beatty nor as to the terms of any such offer.

This announcement is not being made with the consent of Carillion.