After Mouchel announced on 29 March that it had rejected bids from both Costain and Interserve, Costain offered one more week of due diligence talks ahead of the remaining standard transaction implementation steps. Mouchel had called Costain’s offer risky. Costain wanted more time to persuade Mouchel that it wasn't. Mouchel refused.
This prompted Costain to put out a statement to the stock exchange yesterday afternoon (Monday) declaring that it “has no intention of making an offer for Mouchel”.
This announcement from Costain, following a similar one from Interserve on 29 March immediately after Mouchel’s rejection, means that Mouchel is no longer in an offer period for the purpose of The Takeover Code.
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Mouchel Group chief executive Richard Cuthbert said: "I'm delighted that, after a prolonged period of uncertainty and disruption, we can now focus on our clients and our business. In an environment where all of our clients are facing the challenge of delivering higher quality services more efficiently, it is clear that our skills will be increasingly in demand and this underpins our positive long term outlook."
However, under Rule 2.8 of the City Code, Costain has reserved the right to make a new move on Mouchel within the next six months if there is a material change in circumstances or if anyone else makes a play for Mouchel.
Costain is now moving on to look at other potential acquisitions. It said: “Costain's growth aspirations and ambition for the business will be achieved by a combination of organic growth and suitable acquisitions in line with strategy.”
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