Newspaper article The Evening Standard (London, England)

Low-Rise Prospect of Premium at Mowlem

Newspaper article The Evening Standard (London, England)

Low-Rise Prospect of Premium at Mowlem

Article excerpt

Byline: MICKEY CLARK

SPECULATORS were chasing up bid target Mowlem yesterday ahead of what are expected to be agreed terms from rival constructor Carillion.

But whispers in the Square Mile suggest that, because of Mowlem's high debt and big pension fund deficit, the terms are likely to be virtually nil-premium over last night's closing price of 2023/4p.

Early gossip had claimed an offer of 225p a share would be forthcoming but that was quickly dismissed by brokers who follow the company.

An offer price of between 200p to 205p appears more likely, against the shares' peak of 2231/2p at the start of the year. That would give Mowlem a maximum price tag of [pounds sterling]291 million.

The two sides have been in talks for more than a month, with Mowlem having announced news of a bid approach on "Merger Monday" at the end of October.

The terms are likely to be a mixture of cash and shares, which is likely to be the only saving grace for the speculators.

Virgin Mobile was the best performer in the FTSE 250, climbing almost 10% on the back of an [pounds sterling]835 million takeover bid by cable giant NTL.

The 323p-a-share deal has the approval of Virgin's 72% shareholder Sir Richard Branson. If the merger succeeds, it is expected to create a major competitor for Rupert Murdoch's satellite broadcaster BSkyB, bringing together internet broadband, fixed-line and mobile phone operations and cable TV. BSkyB was the biggest bluechip loser and BT was marked lower on fears of tougher times from the increased competition.

Takeover favourite Business Post was among the heaviest FTSE 250 losers after investors learned chief executive Paul Carvell had resigned. The shares have more than halved this year following several major profit warnings, the first of which wiped 40% off the company's market value.

News of a bid approach lifted Biofuels Corporation, which makes biodiesel fuels from rape seed. The news comes just days after it secured new debt facilities with Barclays and announced bigger pre-tax losses of [pounds sterling]13.27 million. The shares were suspended on 16 November at 143p but were finally requoted on Friday and continue to trade well shy of their 302p peak in March. …

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