April 3, 2017 / 12:47 PM / 6 months ago

SNC-Lavalin offers to buy WS Atkins for $2.6 billion

A pedestrian walks past the SNC-Lavalin Group Inc., headquarters in Montreal, May 7, 2009. REUTERS/Christinne Muschi

(Reuters) - Canadian engineering and construction company SNC-Lavalin Group Inc (SNC.TO) has offered to buy WS Atkins ATKW.L for about 2.1 billion pounds ($2.6 billion), the British engineering and consultancy firm said on Monday.

Atkins said SNC planned to offer 2,080 pence per share in cash, 35 percent above Atkins’ closing share price on Friday.

“The board of Atkins has indicated to SNC-Lavalin that the possible offer would deliver value to Atkins shareholders at a level that the Board would be prepared to recommend, subject to reaching agreement on the other terms and conditions of the offer,” Atkins said in a statement.

The boards are discussing other terms and conditions of the possible offer which is conditional upon diligence and financing, Atkins added.

Atkins’ shares jumped to a new high of 2,004 pence following news of the proposal. They were up 29 percent at 1,986 pence in afternoon trading in London.

In January, the stock rose sharply after media reports said the group had been approached by U.S. peer CH2M about a possible $4 billion merger.

Moelis & Co and JPMorgan are advising Atkins.

Last month, SNC Chief Executive Officer Neil Bruce said the company has been weighing acquisitions to boost growth. It has also been cutting costs in order to lift margins at its core engineering and construction division.

Canadian companies have been aggressively looking for deals outside the country, driving outbound mergers and acquisitions to record levels in recent years.

Montreal-based SNC’s shares were halted in Toronto following the Atkins statement.

Reporting by Rahul B in Bengaluru and John Tilak in Toronto; Editing by Mark Potter and Bernadette Baum

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