Engineering, construction and services group Balfour Beatty will not be buying US engineering and construction group J.A. Jones, despite substantive discussions to that end.
Despite the fact that the Balfour Beatty Board believes that the acquisition would create significant strategic and financial benefits, financing the acquisition, while at the same time maintaining an appropriate capital structure, would require an equity issue.
And due to current equity market conditions, the Balfour Beatty Board has concluded that it is not appropriate to raise equity at this time. Accordingly, the company has decided not to proceed with the purchase.
As a result of the costs arising from the detailed, extensive and exclusive due diligence associated with the potential acquisition, however, the company anticipates that an exceptional charge of approximately £9 million will be taken in the 2002 accounts.
Balfour Beatty’s current trading is in line with expectations and the company anticipates that its half-year order book of £4.8 billion will shortly be extended by the addition of major new contracts in rail, civil engineering and building contracts.