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Laing sale to go ahead after pension delays
00:00 18 Jul 2001
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Exclusive by John Leitch
O'Rourke is expected to announce the completion of its acquisition of Laing Construction next Monday. Laing and O'Rourke's legal teams are reported to be drawing up an agreement.
O'Rourke completed its due diligence a month ago. At that time Anglian Water announced that major problems had surfaced over its acquisition of Morrison, a parallel takeover. The Morrison problem caused O'Rourke to re-assess its position, calling for a second round of due diligence.
An insider said that the non-contributory pension scheme enjoyed by the 1,700 Laing Construction employees has been the cause of the delay. Existing Laing Construction employees will have their Laing pension frozen and will start a new pension scheme with O'Rourke. The alternative would have been for around £150m of Laing's £640m pension fund's assets to have been transferred across to O'Rourke so that existing pension arrangements could continue.
Disillusioned by the possibility of losing their first-class pension scheme, many Laing staff have made themselves available for hire. The source said: "Headhunters have a lot of Laing people on their books. They are out there and can be obtained. It has to be something of a worry to O'Rourke as it is basically the staff he is buying.
"However, the situation in Laing is not as bad as it was when the bomb went off - that the construction business was for sale. People are not now going to the lifeboats as fast because they are thinking that O'Rourke might sail the business into better waters.
"However, the idea that Ray O'Rourke might have pulled out isn't the case. Ray has been getting in contact with many senior Laing people to talk about their on-going business."
On the issue of past projects, the deal is said to give O'Rourke the liability on all Laing's past schemes apart from the National Physical Laboratory where losses will run to £40m. By taking more risk, O'Rourke is thought to have negotiated a lower purchase price.
Meanwhile Laing's EPL Access business, which is involved in plant hire, mainly of telescopic platforms, isn't part of the deal and will stay in the group. A management buy-out is expected later.
O'Rourke is expected to announce the completion of its acquisition of Laing Construction next Monday. Laing and O'Rourke's legal teams are reported to be drawing up an agreement.
O'Rourke completed its due diligence a month ago. At that time Anglian Water announced that major problems had surfaced over its acquisition of Morrison, a parallel takeover. The Morrison problem caused O'Rourke to re-assess its position, calling for a second round of due diligence.
An insider said that the non-contributory pension scheme enjoyed by the 1,700 Laing Construction employees has been the cause of the delay. Existing Laing Construction employees will have their Laing pension frozen and will start a new pension scheme with O'Rourke. The alternative would have been for around £150m of Laing's £640m pension fund's assets to have been transferred across to O'Rourke so that existing pension arrangements could continue.
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Disillusioned by the possibility of losing their first-class pension scheme, many Laing staff have made themselves available for hire. The source said: "Headhunters have a lot of Laing people on their books. They are out there and can be obtained. It has to be something of a worry to O'Rourke as it is basically the staff he is buying.
"However, the situation in Laing is not as bad as it was when the bomb went off - that the construction business was for sale. People are not now going to the lifeboats as fast because they are thinking that O'Rourke might sail the business into better waters.
"However, the idea that Ray O'Rourke might have pulled out isn't the case. Ray has been getting in contact with many senior Laing people to talk about their on-going business."
On the issue of past projects, the deal is said to give O'Rourke the liability on all Laing's past schemes apart from the National Physical Laboratory where losses will run to £40m. By taking more risk, O'Rourke is thought to have negotiated a lower purchase price.
Meanwhile Laing's EPL Access business, which is involved in plant hire, mainly of telescopic platforms, isn't part of the deal and will stay in the group. A management buy-out is expected later.
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