Following yesterday’s announcement made by Mouchel Group, Interserve Plc has confirmed that it has no intention to make an offer for Mouchel.
On 25 February 2011, Interserve confirmed that it had entered into a co-operation agreement with Mouchel on the 24 February 2011 which provided Interserve “preferred possible offeror” status following the submission of an indicative proposal, the terms of which the Board of Mouchel was willing to recommend to its shareholders.
Following detailed due diligence, Interserve modified its initial proposal and submitted a revised proposal to the Board of Mouchel valuing each issued Mouchel share at 135 pence including 50 pence in cash.
Yesterday Mouchel’s Board said that Interserve's revised conditional proposal significantly undervalues the business and that Costain's proposal has an unacceptably high level of execution risk to warrant further discussions. Any such discussions would also entail a further period of uncertainty and disruption to the business.
After consulting a number of Mouchel's largest shareholders (who, in total, represent over 50 per cent. of Mouchel's issued share capital), the Board said it has decided it is not in shareholders' interests to proceed with any further discussions with Interserve or Costain. The announcement was not been made with the consent of either Interserve or Costain.
Interserve said it was disappointed that the proposal, which it said was in the best interests of both sets of shareholders, was rejected. The firm now reserves the right to make or participate in an offer for within the six months of this latest announcement under the following circumstances:
- with the agreement or recommendation of the Board of Mouchel;
- following the announcement of an offer by or on behalf of a third party for Mouchel;
- following the announcement by Mouchel of a "whitewash" proposal or a reverse takeover; or
- if there is a material change of circumstances.
Commenting on the announcement Chief Executive of Interserve, Adrian Ringrose, said
"Following several weeks of due diligence we put a revised proposal to the Mouchel Board that we believe was in the interests of both Interserve and Mouchel shareholders. Following Mouchel's decision not to proceed with that proposal we will be focussing on implementing our plans to deliver value for Interserve shareholders through the medium term growth of our business, as outlined in our recent annual results presentation."
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