Henderson agrees to acquire Laing for $1.67bn

An Anglo-Australian asset management company Henderson, on Tuesday announced its plan to acquire UK project manager, John Laing PLC for £887 million ($1.67 billion), in a bid to uplift its private-equity investments in the infrastructure sector.

At the same time, hospital and school builder John Laing has also agreed to bid offered from fund manager Henderson.

John Laing, a British construction company headquartered in central London, specializes in private finance initiatives (PFI) and public-private partnerships (PPI), managing construction projects such as schools, hospitals, roads and police stations, nonetheless the major projects are funded through partnerships between government and private-sector companies.

The highly significant transaction, which is recommended by the boards of both companies, offers holders of ordinary John Laing shares 355 pence (US$6.67) per share in cash, a 28.9% premium to the group's share price before its announcement earlier this month that it had received a preliminary proposal. On the other hand, under the deal, preference shareholders will receive 138 pence per share in cash, the company informed.

John Laing shares rose as much as 7.6 percent to 366 pence (US$6.85), above Henderson's offer price of 355p a share, on hopes of a counterbid.

On the deal price, William Forrester, Laing's chairman said, the price reflects the quality of company's portfolio. "Combining Laing's operational skill base with Henderson Equity Partners' financial capacity should help to ensure Laing's continued development in the U.K. and underpin its expansion into overseas markets," Forrester said in a statement.

Henderson Group, which is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index as well as listed on the Australian Stock Exchange, has secured 23.7% of John Laing and said it had already acquired the support of Laing's board, which owns 0.3%.

Forrester said, the group had previously received interest from other possible bidders and had structured the deal so it could take advantage of any higher offer. He said, "We have had interest," adding further, "While the directors have given irrevocables (undertakings), we've taken care in constructing the deal that we are not precluded from reacting positively to any other approaches."

Laing chairman said, the recommended deal with Henderson would help the group to deliver a planned increase in bid activity in Europe and North America that it outlined at its interim results last month. "To be successful on bidding we need to be sharp on everything ... not just construction prices, but also accessing competitive capital," he said.

"As a public company our access to capital is through debt or from shareholders, both of which are expensive," he added.

The takeover is due to be completed in January, the companies said.