Construction News

Fri February 26 2021

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Balfour calls on shareholders to support Parsons sale

13 Oct 14 Balfour Beatty shareholders will meet on 28th October to vote on the board’s proposal to sell its US engineering subsidiary, Parsons Brinkerhoff.

Last month Balfour Beatty’s board agreed to sell Parsons Brinkerhoff to the Canadian-owned consulting engineer WSP for £820m. (See previous report here.)

But the deal still requires shareholder approval to complete and given all the recent turmoil at Balfour Beatty – with successive profits warnings and no chief executive since May – this remains far from certain.

Plans for a merger with Carillion this summer collapsed over the insistence of Balfour Beatty’s board that selling Parsons Brinkerhoff was the right strategy. Carillion said that it only wanted to be with a Balfour Beatty that included the revenue and profitability of the US operation.

Balfour Beatty says that it still expects the Parsons Brinkerhoff sale to complete before the end of the year.

Meanwhile the share price continues to slide. Balfour Beatty’s share price starts the week at 152p, down from a 2014 high of 321p in March. As recently as two weeks ago it was at 225p. (See previous report on Balfour Beatty's deteriorating share price here.)

In 2013, Parsons Brinckerhoff generated revenues of £1,569m, underlying profit from operations of £56m, underlying EBITDA of £69m and profit before tax of £27m. As at 27 June 2014, the order book stood at £1.3bn and gross assets were £800m.

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