Engineer Costain Group PLC (LON:COST) has tabled a higher offer for Mouchel Group PLC (LON:MCHL) in order to gain approval from the Mouchel board for the planned takeover.
Its initial all-share offer of 0.5135 new Costain shares for each Mouchel share - valuing every Mouchel share at 105.8 pence - was rejected just before Christmas.
Costain has on January 19 put forward a revised proposal comprising 0.5531 new Costain shares and 30.0 pence in cash for each Mouchel share which, based on Costain's share price at the close of business yesterday, values each Mouchel share at approximately 153.2p.
The new offer represents a 171 percent premium to Mouchel’s closing price on 3 December 2010, being the last business day prior to Mouchel entering into its current offer period.
Costain chairman David Allvey said: "The strategic rationale for a combination has been widely supported and following extensive discussions with both sets of shareholders we have now significantly enhanced our proposal.
"We firmly believe that a combination of the two businesses is clearly in the best interests of both sets of shareholders and would bring resolution to the issues Mouchel faces for the benefit of its shareholders, customers and employees after a sustained period of uncertainty.
"Having made our first approach to Mouchel seven weeks ago and as one of a number of options to deliver our strategy, we believe that our revised proposal is attractive to both sets of shareholders and should now encourage Mouchel's board to engage with us without delay."