Ferrovial makes bid for Transfield

Spanish contractor and infrastructure operator Ferrovial has made a non-binding offer to acquire Australian construction and asset management company Transfield Services.

Ferrovial says its cash offer of AU$ 1.95 (US$ 1.73) per share represents a 39% premium on Transfield’s average share price over the week running up to the offer being made. However, it is not being recommended to shareholders by the Board of the AU$ 3.7 billion (US$ 3.3 billion) per year company. Ferrovial’s cash offer values Transfield at AU$ 1 billion (US$ 885 million)

Transfield Chairman, Diane Smith-Gander, said, “The Board of Transfield Services has considered Ferrovial’s proposal with the Company’s advisers and has formed the view that the price of $1.95 per share does not reflect the underlying value of Transfield Services shares.”

In response, Ferrovial said that this may prevent it from making a definititive offer. “Ferrovial Services notes that the Transfield Services Board is not willing to support its current proposal and intends to provide only limited due diligence. Sufficient due diligence is required to enable Ferrovial Services to put forward a definitive transaction that can be considered by shareholders,” said a company statement.

Transfield has 19,000 employees across 10 countries, with asset management activities spanning the the resources, energy, industrial, infrastructure, property and defence sectors.