Construction giant Balfour Beatty has set out a detailed rejection of the latest merger advances by Carillion after it turned up the pressure by claiming the tie-up could bring £175 million in annual cost savings.
Balfour said the offer was unchanged from a proposal it had turned down earlier this week, and reaffirmed its rejection, while spelling out its doubts about the synergy claims.
It described the merger approach as "opportunistic" and reiterated that it had a "clear standalone plan for delivering value".
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However analysts at Investec believe that resisting a deal would prove a missed opportunity for troubled Balfour, which earlier this week disclosed a 53% slump in half-year profits, and is still looking for a new chief executive after the departure of Andrew McNaughton.
Balfour revealed on Monday that executive chairman Steve Marshall met Carillion counterpart Philip Green for talks a week before following the rejection of an earlier proposal.
But the potential tie-up has foundered on Carillion's wish to cancel Balfour's planned sale of its US business Parsons Brinckerhoff.
Balfour's latest statement comes a day after Carillion set out what it said were the powerful financial benefits of creating a £3 billion combined group, and disclosed that it had been in talks with major shareholders.
Carillion has also pledged an additional 8.5p per share dividend for Balfour investors.
Balfour responded to the pressure by saying it had "serious reservations" about the claims for synergies.
Today, in a more detailed response, the group that the proposals would mean cutting the size of its UK construction business by two-thirds, eating into potential profitability gains at a time when it looks well-placed to benefit from a recovery in the sector.
It also highlighted the risks inherent in executing a merger deal.
"The implementation programme would be complex, requiring simultaneous business restructuring, integration and outsourcing, at the same time as a significant IT change programme which is already under way."
Balfour added that it had decided to sell the Parsons Brinckerhoff business in the US "as it did not deliver material competitive advantage for the group and added significant complexity".
The sale process was "well advanced" and terminating it risked "damaging a significant part of the value of Balfour Beatty".
Investec analyst Andrew Gibb said: "Unless Steve Marshall has a rabbit up his sleeve in terms of another suitor post a disposal of Parsons Brinckerhoff, the board's rejection of Carillion's proposed merger is likely to prove a missed opportunity for the shareholders of Balfour Beatty.
"In our view, Carillion's merger looks compelling and far more attractive than relying on a management team at Balfour Beatty that has presided over shareholder value destruction in the past few years.
"A standalone Balfour Beatty does not look attractive, the Carillion deal does."