URS had to sweeten its offer by an extra £62m after its first £161m takeover proposal was trumped on the day it was made public by rival CH2M Hill with a bid of £189m.
Last night CH2M Hill said it had thrown in the towel after URS bounced back with a £223m deal clinching bid.
The cash offer to pay 290p a share was recommended unanimously by the Scott Wilson board of directors and represents a handsome mark up on the UK consultant’s share price of 81p just before it said it had received bid approaches.
One consolation for CH2M Hill is it stands to make a good profit on the deal after building a near 13% stake in Scott Wilson during the battle for control. A statement from the firm confirmed it bought 9.5m shares at 245p each.
Lee McIntire, chairman and chief executive officer of CH2M Hill, said: “While Scott Wilson is an excellent company and an attractive cultural fit with CH2M Hill, it is not felt to be value enhancing to us at the current valuation.
“We understand the importance of certainty to all those impacted by the offer process, in particular the employees and customers of Scott Wilson, and have decided to make clear today that we will no longer proceed with the acquisition of the company.
“We sincerely wish the management and staff all the best in the future. We will follow the Scott Wilson Board’s recommendation in terms of our shareholding.”
Martin Koffel, chairman and chief executive officer of URS, said, “We are pleased to have reached agreement with the Scott Wilson board on an increased offer for the company.
“We continue to believe that the combination of URS and Scott Wilson will create a global business with the financial resources to invest in further growth for the benefit of the enlarged group’s clients and employees.”
The bidding war emerged as Scott Wilson reported full-year results, showing near-doubled, pre-tax profits of £18m, up from to £9.4m in the preceding year, despite revenue slipping to £340.4m from £360m.
Hugh Blackwood, group chief executive of Scott Wilson, will join URS’ management committee and will oversee from London the combined international operations for U.K./Ireland, Europe, Middle East, India, and China.
Other members of Scott Wilson’s executive management team will have roles with URS, which will be finalised when the deal is complete.
Scott Wilson has more than 5,500 employees at a network of 80 offices around the world, including offices in key regional centers such as London, Hong Kong, New Delhi, Warsaw and Dubai.