SNC-Lavalin in talks about possible takeover of WS Atkins for C$3.5 billion

SNC-Lavalin in talks about possible takeover of WS Atkins for C$3.5 billion

MONTREAL — SNC-Lavalin is in talks to acquire WS Atkins PLC, an engineering and project management consultancy based in London, for the equivalent of C$3.5 billion.

Shares in WS Atkins soared Monday as it said it has received a tentative offer from the Montreal engineering giant worth 20.80 pounds cash per share.

WS Atkins said its board is prepared to recommend the offer, subject to reaching agreement on other possible terms and conditions, but warned there is no guarantee that a deal will be concluded.

WS Atkins stock closed up nearly 27 per cent at 19.50 pounds on the London Stock Exchange on Monday.

The company said under the rules governing takeovers and mergers, SNC-Lavalin (TSX:SNC) is required to make a firm offer or withdraw by May 1.

For its part, SNC-Lavalin said any firm offer would be subject to the satisfaction of a number of pre-conditions including the recommendation of the board of directors for WS Atkins. SNC-Lavalin said it also reserves the right to make a lower offer depending on the circumstances.

SNC-Lavalin said if the deal was to proceed as it is currently contemplated, up to $1.9 billion will come from Caisse de depot et placement du Quebec in the form of $400 million in equity and a $1.5 billion non-recourse loan secured by its interest in Highway 407 in Ontario. The balance would be raised using a mix of additional debt and equity and other financing.

Canaccord Genuity analyst Yuri Lynk estimated the deal values WS Atkins’s equity at C$3.5 billion, and C$3.7 billion including debt.

Lynk said SNC-Lavalin has been vocal about wanting to acquire a company that would increase its exposure to infrastructure and power markets while also giving it a presence in Europe and/or Asia.

“With the exception of adding meaningful Asian exposure, we believe Atkins meets all of these requirements,” Lynk said.

The Canadian Press

Note to readers: This is a corrected story. A previous version had an incorrect cash per share offer.

…………………………………………………………………………………………………………….……………………………The_Quebec_Book_cover_Promo_small

Would you like to support a project based right here in Quebec?

This book is being co-authored by two people who are passionate about Quebec and everything it has to offer. One of the authors moved to the region some years ago while the other was born and raised in Quebec.

The Québec Book is a unique guide for anyone interested in learning about Quebec culture and the language spoken here. You could be someone visiting Québec, planning to move to Québec, or already living here. Or maybe you’re a native English speaker, a native French speaker, or a speaker of any other language for that matter.

Pre-Order The Québec Book Now and Receive a Bonus!

Categories: Business

About Author

Write a Comment

Only registered users can comment.