WS Atkins rejects CVC approach

WS Atkins, the UK-listed support services group, has rejected an initial approach from UK buyout firm CVC Capital Partners.

CVC allied itself with WS Atkins executive chairman Michael Jeffries to make an indicative 160 pence per share offer for the business, valuing it at £160m.

In a statement to the London stock exchange yesterday, WS Atkins confirmed that it had rejected an initial offer for the company. The Financial Times newspaper reports that CVC is keen to further pursue the business, but that it will not make a hostile offer.

WS Atkins, part of a consortium that is currently bidding to run part of the London Underground system, confirmed that it had received a number of other expressions of interest, thought to include Electra Partners and Apax Partners.

Over the past twelve months, WS Atkins share price has fallen from over 650 pence to its current level of 118 pence. The share price fell below 50 pence at the beginning of October when the company announced a profit warning and the departure of chief executive Robin Southwell.

However, the company said yesterday that it had successfully arranged a five-year loan from Barclays, HSBC and Royal Bank of Scotland, worth around £200m, which will enable it to refinance £120m of existing debt and provide enough working capital for existing projects. The company also announced that it has secured new contracts worth £172m.

CVC is currently involved in the auction for Bertelsmann Springer, the science and business publishing unit of German media group Bertelsmann. It is bidding alongside US firm Blackstone Group.