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VT Group targets JAS
11:09 20 Oct 2004
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VT Group, the defence contractor, is in the running for what is left of Jarvis Accommodation Services (JAS). The news comes just days after Jarvis announced that Vinci is to buy its PFI bid teams.
Well-placed sources told CJ that VT Group, formerly Vosper Thorneycroft, is one of at least eight companies that have expressed an interest in all or part of JAS.
Other names in the frame include Laing O’Rourke, Hochtief, Amec and Bovis.
Five companies are said to have expressed an interest in buying all of the accommodation division. Hochtief and VT Group are tipped as hot favourites.
A VT spokesman said: “We never make any comment on possible new acquisitions.”
He added: “Obviously we are casting our net all the time for possible acquisitions, but we would not comment until we had something to say.”
A Hochtief spokesman denied that it was, or ever had been, interested in the business. Industry observers expressed surprise at this statement.
One said: “It’s common knowledge that Hochtief wants to expand its presence in PFI both here and in the rest of Europe. I’d be surprised if it hadn’t at least looked at it.”
Negotiations for the sale of Jarvis’s accommodation division are taking place under increasing pressure. Sources revealed this week that Jarvis’s deal to sell off its bid teams on four PFI schools contracts at Manchester, Norfolk and Bangor in Northern Ireland and Cork in the Republic to Vinci, was driven by the clients’ rising concern at Jarvis’s precarious position.
Both Manchester and Norfolk councils had threatened to pull the plug on preferred bidder talks with Jarvis.
One source close to Jarvis said: “Jarvis was seeking to dispose of accommodation services as one single entity and there have been a number of approaches from different companies, all with different offers and the due diligence has been taking some time.
“But Manchester and Norfolk said they would quit if Jarvis didn’t come up with something pretty quick. They were getting very jumpy. So Jarvis decided to do a two-stage deal by selling off the PFI bid teams first.”
Other leading PFI practit-ioners questioned the wisdom of taking on Jarvis’s contracts, particularly the Norfolk Schools PFI. One leading PFI managing director said: “Reputationally and financially, to take on that risk, you need to be confident of the quality of it.
“Things like the cleaning can be sorted out, but lifecycle costs on a difficult asset, which may have been value-engineered in the very worst sense, is another thing entirely.”
He added: “Norfolk does not work. The construction price is below what it can be built for.”
Meanwhile, Jarvis’s PFI bidding teams are waiting for Vinci to decide their fate. One Jarvis source said: “Development director Stephen Hornby and various Jarvis people met with Vinci yesterday. They have all our CVs and we’ve been told they will let people know who they want and who they don’t want within two weeks.”
Well-placed sources told CJ that VT Group, formerly Vosper Thorneycroft, is one of at least eight companies that have expressed an interest in all or part of JAS.
Other names in the frame include Laing O’Rourke, Hochtief, Amec and Bovis.
Five companies are said to have expressed an interest in buying all of the accommodation division. Hochtief and VT Group are tipped as hot favourites.
A VT spokesman said: “We never make any comment on possible new acquisitions.”
He added: “Obviously we are casting our net all the time for possible acquisitions, but we would not comment until we had something to say.”
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A Hochtief spokesman denied that it was, or ever had been, interested in the business. Industry observers expressed surprise at this statement.
One said: “It’s common knowledge that Hochtief wants to expand its presence in PFI both here and in the rest of Europe. I’d be surprised if it hadn’t at least looked at it.”
Negotiations for the sale of Jarvis’s accommodation division are taking place under increasing pressure. Sources revealed this week that Jarvis’s deal to sell off its bid teams on four PFI schools contracts at Manchester, Norfolk and Bangor in Northern Ireland and Cork in the Republic to Vinci, was driven by the clients’ rising concern at Jarvis’s precarious position.
Both Manchester and Norfolk councils had threatened to pull the plug on preferred bidder talks with Jarvis.
One source close to Jarvis said: “Jarvis was seeking to dispose of accommodation services as one single entity and there have been a number of approaches from different companies, all with different offers and the due diligence has been taking some time.
“But Manchester and Norfolk said they would quit if Jarvis didn’t come up with something pretty quick. They were getting very jumpy. So Jarvis decided to do a two-stage deal by selling off the PFI bid teams first.”
Other leading PFI practit-ioners questioned the wisdom of taking on Jarvis’s contracts, particularly the Norfolk Schools PFI. One leading PFI managing director said: “Reputationally and financially, to take on that risk, you need to be confident of the quality of it.
“Things like the cleaning can be sorted out, but lifecycle costs on a difficult asset, which may have been value-engineered in the very worst sense, is another thing entirely.”
He added: “Norfolk does not work. The construction price is below what it can be built for.”
Meanwhile, Jarvis’s PFI bidding teams are waiting for Vinci to decide their fate. One Jarvis source said: “Development director Stephen Hornby and various Jarvis people met with Vinci yesterday. They have all our CVs and we’ve been told they will let people know who they want and who they don’t want within two weeks.”
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