The new offer is 0.5531 new Costain ordinary shares plus 30.0p in cash for each Mouchel share. This values each Mouchel share at approximately 153.2p and is worth 13.5% more than its last offer on 6 January.
Costain says that its latest bid represents a premium of 171% over Mouchel’s closing share price of 56.5p immediately prior to it entering the current offer period on 6 December 2010.
Costain’s previous offer, rejected by the Mouchel board earlier this month, was for just 0.5947 new Costain shares for each Mouchel share, representing a premium of 138.9% on the 6 December price.
The board of Costain continues to argue that the two companies are a great fit. Bringing the two together would create one of the UK's premier solutions providers, it says, with major capabilities across consulting, construction and care for larger, longer term "bundled" or multi-disciplinary contracts.
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Commenting on the revised share and cash proposal, Costain chairman David Allvey said: "The strategic rationale for a combination has been widely supported and following extensive discussions with both sets of shareholders we have now significantly enhanced our proposal.
"We firmly believe that a combination of the two businesses is clearly in the best interests of both sets of shareholders and would bring resolution to the issues Mouchel faces for the benefit of its shareholders, customers and employees after a sustained period of uncertainty. Moreover, as part of a strong Costain group with a well-capitalised balance sheet, Mouchel would be better placed to compete effectively for major contracts.
"Having made our first approach to Mouchel seven weeks ago and as one of a number of options to deliver our strategy, we believe that our revised proposal is attractive to both sets of shareholders and should now encourage Mouchel's Board to engage with us without delay."
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