Costain to merge with May Gurney

UK construction company Costain is to buy infrastructure and maintenance firm May Gurney for about 177m pounds in an all share deal.

UK construction company Costain is to buy infrastructure and maintenance firm May Gurney for about 177m pounds in an all share deal.

The merger will create a combined infrastructure group with a market capitalisation of £378m and sales of £1.6bn a year, the companies announced Wednesday.

Each May Gurney shareholder will receive 0.8275 of a new Costain share, or about 252p per share.

Andrew Wylie, Chief Executive of Costain, would lead the combined company which would create a challenge to rivals such as Balfour Beatty and Carillion.

The deal is subject to shareholder approval. Costain shareholders would own 53% of the group while May Gurney shareholders would hold 47 %.

May Gurney, which helps maintain Britain's highways, rail and utilities services, last September issued a profit warning and lost its Chief Executive after admitting that waste and collection contracts in Bristol and Chester were so poorly written that it was losing money.

Costain, on the other hand, in early March reported a 16% rise in full-year adjusted profit.

Rothschild was the financial adviser to Costain, which builds and maintains highways, rail stations and airports.

Canaccord Genuity advised May Gurney.

RD

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021
Four investment trusts for income investors to buy now
Investment trusts

Four investment trusts for income investors to buy now

Some high-yielding listed lending funds have come through the crisis with flying colours. David Stevenson picks four of the best.
12 Apr 2021