Bovis sets up stalking horse to attract buyer

by Graham Ridout



Speculation is rising that John Laing is being used as a stalking horse by Bovis in pursuit of a prospective buyer.

Both the chairman and deputy chairman of Laing, Sir Martin Laing and Robert Wood, have categorically denied that the two companies, which have a total turnover of £3.3 billion, have been in talks over a possible merger or take-over.

Lord Sterling, chairman of Bovis' parent P&O, has also scotched rumours of talks, although he has not ruled out selling Bovis if the price was right. However, attempts are being made to link the two "top six" contractors.

One source close to Bovis' top management reported that the two firms had been discussing a possible tie-up. Another insider did not rule out the probability of talks between the two sides. A leading analyst commented that he did not "see any great purpose in Bovis joining with Laing" apart from being "bigger". He felt that Bovis would be better suited joining with a European contractor.

The other firm being linked to Bovis is Hochtief. The German giant this week again strenuously and repeatedly denied that it was in talks on any business relationship with Bovis.

Helping to fuel speculation is Laing's plans to merge its building management and construction divisions in a move to consolidate activities, reduce costs and focus on sector-specific procurement. Construction chairman David Blair confirmed that the divisional structures will end and that the "brand names will disappear."