Costain ups Mouchel bid

UK engineering and construction company Costain has upped the ante with takeover target Mouchel after revealing a third approach for the London-based support services group.

Twice-rejected Costain described its third proposal as "significantly enhanced". The revised offer values Mouchel at over £ 170 million (€ 199 million), and proposes paying approximately 153,2p for each share.

But Mouchel's response to Costain's 21 January approach was less than enthusiastic. Mouchel indicated that Costain was not alone in approaching the group since its first offer was made public in early December.

"Since 6 December, we have received approaches which would, if made, result in an offer being made for the company for the purposes of the City Code on Takeovers and Mergers. Since then, we have received further approaches. We are actively reviewing these and other options," Mouchel said.

The takeover target also pointed to its refinancing plans, which it said had developed apace and could bear fruit earlier than previous estimates of March.

"We have made significant progress and expect to finalise the new facilities shortly. The group's key relationship banks, Barclays, Lloyds Banking Group and RBS, remain supportive.

Mouchel added that it "strongly advises" shareholders to take no action in the face of the latest bid.

Costain's third offer comes after Mouchel earlier this month rejected Costain's second takeover proposal, which valued the company at £ 152 million (€ 183 million).

Costain expressed surprise at the rebuff, but Mouchel's board said the revised 135p all-share offer, up from 105.8p in December, still undervalued its business.

Costain said a tie-up between the two businesses would create an entity with a combined forward order book of over £ 4 billion (€ 4,8 billion).