Interserve's proposal is a combination of cash and shares.
Interserve said that its strategic rationale for the deal was to create a market leader in consultancy and support services. It said that benefits for Mouchel shareholders include a stronger balance sheet and improved growth opportunities both in the UK and internationally.
“Interserve believes that the combination of Interserve and Mouchel would provide a much stronger platform from which to target the rapidly growing market for fully integrated outsourcing services. Interserve's approach is friendly, strategically compelling and the company sees itself as an excellent home for Mouchel and its people,” Interserve said in a statement.
Yesterday morning Mouchel declared that it was close to doing a deal with a preferred bidder, having accepted that merger offered the best prospects for shareholders.
Costain later announced that it was not the party in negotiations with Mouchel. Costain has made several approaches to Mouchel in recent weeks, increasing its offer each time. Each was rebuffed.
Mouchel, it seems, prefers a company with a strategy more closely aligned to its own, rather than one that would offer a wider revenue base.
Interserve has move away from construction to focus on support services. Costain remains a construction major, but saw Mouchel as an easy route to expansion into the public sector outsourcing business.
Both Mouchel and Interserve have moved a long way from their roots in the past decade.
Mouchel has expanded from traditional consulting engineer base, including LG Mouchel and Parkman, to offer a wide range of technical and not-so-technical support services. Turnover in 2010 was £633m.
Interserve’s roots lie on pure contracting, including RM Douglas and Tilbury (originally The London and Tilbury Lighterage Contracting and Dredging Company). Since changing its name from Tilbury Douglas to Interserve in 2001 it has focused increasingly on support services
Its strategy today is “is to be The Trusted Partner, bringing together all of our outsourcing capabilities to create innovative solutions that support long-term relationships with our customers”.
Interserve’s turnover was £1900m in 2009.
Got a story? Email news@theconstructionindex.co.uk
