Balfour Beatty is in trouble and could do with a bit of spare cash, but apparently isn’t panicky enough to sell off its assets on the cheap. Today it rejected a £1bn offer from John Laing Infrastructure Fund (JLIF) for its investments arm which includes 60 PFI contracts.
JLIF is a FTSE 250 listed investor in roads, schools and hospitals, and currently has 54 PFI deals of its own. The £1bn offer only slightly falls short of the £1.05bn Balfour directors had valued the portfolio at, but the board has other ideas.
It said that given ‘current and expected future strength of the market’, and a recent sale which exceeded directors’ valuations by 28%, the assets were worth ‘substantially in excess of the current directors’ valuation'.
The construction giant has had an extremely testing year, issuing three profit warnings and losing its second chief executive in as many years. In summer it narrowly escaped being acquired by rival Carillion, a prospect which is expected to rear its ugly head again in February when takeover rules permit.
New boss Leo Quinn joins from his current role at Qinetiq in January and will be hoping to make his mark and turn things around. Given its three profit warnings this year, it’s not hard to imagine the board is hanging on to make sure it can squeeze JLIF for all it can get.