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

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.

Rejection of Carillion's Proposal

The Board of Balfour Beatty has further considered the announcement from Carillion plc ('Carillion') dated 14 August 2014. The proposal remains unchanged to that rejected on 11 August 2014. The Board reaffirms its rejection of the proposal. A more detailed analysis is set out below.

In reaching its decision on the merger proposal, the Board has considered:

· the potential for synergies;

· cost and execution risks;

· a reduced exposure to recovery in UK construction;

· risk of revenue and cost leakage; and

· the impact of terminating the Parsons Brinckerhoff sales process.



The Board has also considered the opportunities represented by pursuing its independent strategy, the benefits of which will accrue 100% to its shareholders. These include:

· a recovering UK construction business;

· the opportunity to deliver further efficiencies;

· a strong US construction business in a growing market;

· a leading Investments business;

· material exposure to recovery in the UK; and

· the anticipated successful sale of Parsons Brinckerhoff


more...

Rejection of Carillion's Proposal

The Board of Balfour Beatty has considered the terms of the revised merger proposal from Carillion plc ("Carillion") dated 19 August 2014 and consulted with its major shareholders.

The revised proposal again fails to address the two key concerns that Balfour Beatty has consistently raised:

1. The considerable risks associated with the proposed business plan, including the strategy to significantly reduce the scale of the UK Construction business when it is poised to benefit from a recovery in the market; and
2. The continued intention to terminate the sale of Parsons Brinckerhoff at a point when it is reaching a successful conclusion.

Accordingly, the Board has unanimously concluded that the proposal is not in the best interests of its shareholders and has decided to reject the proposal. Therefore the Board will not be seeking an extension to the PUSU ("Put Up or Shut Up") deadline of 5pm on 21 August 2014.

The Board also notes that the revised proposal represents only a small value change in the terms compared to the proposal from Carillion rejected on 11 August 2014. Further details are set out within the Appendix.


more...

Take your pick :-

Westhouse Securities Sell 246.20 183.00 183.00 Reiterates

Liberum Capital Buy 246.20 280.00 280.00 Reiterates

with the legacy construction projects coming to an end, new orders - presumably this work will not repeat underpricing, ordinary divi being maintained, probable special divi from PB and Carillion (others?) sniffing around the downside should be limited. Will hold in the sipp for income for now.

It begins..

Sale of Parsons Brinckerhoff

Balfour Beatty announces the sale of its professional services division, Parsons Brinckerhoff, to WSP Global Inc. for a cash consideration of US$1,352.5 million (£820 million). The sale price assumes cash of US$110 million (£67 million) is retained within Parsons Brinckerhoff.

The sale constitutes a Class 1 transaction under the UK Listing Rules and is therefore conditional upon the approval of Balfour Beatty shareholders. The transaction is also subject to certain antitrust and other approvals. Completion of the sale of Parsons Brinckerhoff is expected in Q4 2014.

Upon completion of the sale, the cash proceeds are intended to be used, after deductions of transaction taxes, fees and other transactional costs of approximately £50 million, together with certain separation-related costs of approximately £30 million, as follows:

· up to £200 million to be returned to shareholders;
· approximately £85 million to reduce the Group's pension fund deficit; and
· the balance to be retained by the Group to ensure a strong balance sheet and provide increased financial flexibility.

The competitive sale process has demonstrated the value of the Parsons Brinckerhoff business within a rapidly consolidating global professional services sector. The consideration of £820 million, less £67 million of cash retained within Parsons Brinckerhoff, represents a multiple of 11x underlying EBITDA for the year ended 31 December 2013.

Following the sale, and the recent revaluation of the PPP portfolio, the Group's key strategic priorities are:

· restoring the value of the UK construction business, including progressively returning it to peer group margins;
· continuing to build on the good performance of the investments and services businesses;
· leveraging the growth opportunities in US buildings, US civils, rail and power, and the Group's Far East and Middle East Joint Ventures;
· realising further indirect overhead savings and shared service efficiencies across the Group; and
· continuing to assess all other value creation opportunities.

Balfour Beatty will be repositioned as an Anglo-American infrastructure group focused on construction, services and investments, comprising:

· top tier national and regional construction businesses in the UK and US;
· a leading international investments business;
· a services division with a number of specialist construction and asset management businesses; and
· successful construction joint ventures in the Far East and Middle East.

Steve Marshall, Executive Chairman of Balfour Beatty said: "The Board believes that the sale price of £820 million delivers both a significant return on our original investment and a compelling level of value creation for shareholders - which remains the key focus of the Board. The sale of Parsons Brinckerhoff follows the recent revaluation of our investments portfolio, which underlines the potential of this division to create value internally and across the Group. In the US, our core construction business is well positioned in a recovering market. In the UK we see the potential for margins to progressively recover to peer group levels. Our services business, meanwhile, is well placed to benefit from the growing investment in infrastructure. Together, these elements will provide a strong foundation for an incoming Group CEO to take the company forward."

Goldman Sachs International acted as lead financial adviser to Balfour Beatty. BofA Merrill Lynch also provided financial advice in relation to the transaction.

ENDS

£200 m returned to 689m shares is 29p roughly. Given the muted share price reaction I'm wondering if I've got that wrong?

Westhouse Securities Sell 243.10 241.10 183.00 183.00 Reiterates

Liberum Capital Buy 243.10 241.10 280.00 280.00 Reiterates

Contract Win

Balfour Beatty signs US $116 million contract to construct new educational facility in Denton, Texas

Balfour Beatty plc today announces that its US construction services business has signed a US $116 million (£70 million) programme to build a new comprehensive high school in Denton, Texas.

Over the last 14 years Balfour Beatty has constructed 49 educational facilities in partnership with Denton Independent School District, which covers the city of Denton and neighbouring towns in an area of 180 square miles.

In this latest, and 50th, contract Balfour Beatty will construct a high school with the capacity for 2,400 students and the potential to grow further. Significant energy-efficient lighting, heating, and water management features are being incorporated as well as rooms to withstand severe weather. The project is scheduled to complete in 2016.

Mark Layman, CEO of Balfour Beatty's US Construction Services business, said: "Our long standing relationships in growth markets are critically important and we are proud to be working with the district once again, and applying the latest innovations in construction methodology and technology to deliver more efficient, cost effective buildings."

ENDS

BALFOUR BEATTY TRADING UPDATE

SUMMARY
Balfour Beatty, the international infrastructure group, today announces a further profit shortfall of approximately £75 million in Construction Services UK. The Group also announces that it has appointed KPMG to undertake a detailed independent review of the contract portfolio within Construction Services UK. The review will focus on commercial controls, on 'cost to complete' and contract value forecasting and reporting at project level. KPMG are expected to report back to the Board by the end of the year. Trading across the rest of the Group remains in line with expectations.

The process to appoint a new Group CEO is now at an advanced stage, and an announcement will be made in due course. Steve Marshall has indicated to the Board that, following the handover of his interim executive responsibilities to a new Group CEO and the identification of a new non-executive Chairman, he intends to step down from the Board.

The Circular to Shareholders for the sale of Parsons Brinckerhoff is expected to be issued in October. It is anticipated that up to £200 million will be returned to shareholders in the form of a share buyback programme, subject to the disposal completing. The buyback programme will be implemented following the announcement of the Group's 2014 preliminary results, subject to the Board's assessment of the trading environment at the time.

The final dividend for 2014 will also be reviewed in the light of the Parsons Brinckerhoff disposal with a view to establishing a level of future dividend cover appropriate for the Group's re-shaped portfolio of businesses.

I wonder if its worth considering the prefs?

BALFOUR BEATTY ANNOUNCES DISPOSAL OF PPP ASSET AND THREE NEW PROJECTS

Balfour Beatty, the international infrastructure group, announces the disposal of its 50% interest in the Pinderfields and Pontefract Hospital PPP project ("Pinderfields"), in West Yorkshire, UK. In addition, Balfour Beatty has reached financial close on a multi-family housing project in the US and been appointed preferred bidder for two student accommodation projects in the US and Australia.

Pinderfields is being acquired by the current co-shareholder, a subsidiary of HICL Infrastructure Company Limited, the listed infrastructure investment company advised by InfraRed Capital Partners. The consideration of £61.5 million exceeded management's expectations, generating a gain on disposal of £42.2 million. The proceeds exceed the revised Directors' Valuation by £13.5 million, representing an uplift of 28%.

In August 2014 Balfour Beatty published a review of the Directors' Valuation of the PPP portfolio, which resulted in the UK portfolio valuation increasing by 63% to £801 million, and the total portfolio increasing in value by 46% to £1,051 million, as at June 2014.

As part of Balfour Beatty's strategy to recycle equity invested in its portfolio, the Group also announces that it has reached financial close on Carmendy Square, a multi-family housing community in Florida, USA, and has also been appointed preferred bidder on two new student accommodation projects, one for The University of Texas at Dallas and one for University of Wollongong in Australia. Balfour Beatty expects to invest approximately £20 million of equity in these projects over the next three years.

Carmendy Square is Balfour Beatty Investment's first investment into amulti-family housing project in the US. The Dallas project is the third student accommodation success in the US in 2014, whilst the Wollongong project is its first project in Australia, leveraging market expertise from the UK and US.

Ian Rylatt, CEO of Balfour Beatty Investments, said: "This disposal supports the substantial increase in the Directors' Valuation of the PPP portfolio, whilst also demonstrating that the valuation maintains a level of prudence. We continue to see a strong pipeline of opportunities and therefore, in line with our strategy of recycling equity, the proceeds will be invested in new projects as we continue to diversify our business."

ENDS


I hold HICL

Flogging off the crown jewels to prop up the rest of the company. This is a disaster company.