Costain approached the board of Mouchel on 2 December 2010 proposing a share exchange deal worth 105.8p per share to Mouchel shareholders 鈥� a premium of 87% to the closing Mouchel share price of 56.5p per share on 3 December.
The offer also represents a premium of nearly 30% to the average closing Mouchel share price of 81.7p for the period since Mouchel's preliminary results announcement on 28 October.
Costain proposed that Mouchel's shareholders would receive 48% of the enlarged issued share capital of Costain.
Mouchel鈥檚 board rejected the proposal on 6 December 2010 and there are currently no discussions taking place between Costain and Mouchel.
Mouchel, however, faces a debt burden of 拢109m and its banks have called in Deloittes to review the business before they will agree any refinancing.
According to Costain, the two companies 鈥渁re highly complementary businesses鈥� and a takeover would have聽significant benefits for both sets of shareholders.聽
Costain wants Mouchel鈥檚 design and consultancy expertise to put it in the front rank for multi-disciplinary projects. Chairman David Allvey said: "The board of Costain believes that there is a compelling strategic rationale for combining Costain and Mouchel.聽 In particular, it would provide the enhanced critical mass required by blue-chip customers who are increasingly moving to larger, longer-term bundled or multi-disciplinary solutions.
"The board also believes that bringing together two of the UK's premium brands with major capabilities across consulting, construction and care, resulting in an order book of over 拢4 billion, would also create significant value for both sets of shareholders."聽