MONOPOLY CAPITALI$M; M&A

KKR in £2bn takeover of infrastructure giant John Laing

SIMON NEVILLE, PA CITY EDITOR19 May 2021



Private equity giant KKR has made a £2 billion offer for one of the UK’s biggest infrastructure firms John Laing.

The 403p-a-share bid has been accepted by the board and will now be put to shareholders to vote on the proposals, with 75% of investors needing to approve the plans.

John Laing has over 150 projects and businesses across the globe with significant focus on the renewables sector, through wind and solar farms.

KKR is keen to tap into the high-growth markets as governments globally tackle the need to decarbonise.

In the UK, the infrastructure business also invested in the £4.7 billion intercity express rail programme, providing trains for the Great Western and East Coast rail routes.

The Hitachi trains were recently pulled from services due to safety concerns after cracks appeared in the chassis.

Inspections were carried out and the 800 trains allowed to return to service earlier this month.

Another area of growth for John Laing are social enterprises, revealing last month it would invest £200 million in retirement homes developed by McCarthy & Stone to help address a shortage of elderly accommodation in Britain.

On the deal with KKR, John Laing’s chairman Will Samuel said: “Whilst the board has full confidence in John Laing’s strategy and management team, it is clear that many of the initiatives are at an early stage of development, retain an element of execution risk and that it will take time for these to deliver value.

“The John Laing board believes that the offer from KKR represents an attractive and certain value in cash today for John Laing shareholders and reflects the high quality of the business, its people and future prospects, as well as providing a positive outcome for John Laing pensioners.”

Tara Davies, partner and co-head of European Infrastructure at KKR, said: “There is growing global demand for national infrastructure which delivers societal benefit and reflects technological advances and policy priorities across areas such as connectivity, renewable energy and transport.

“Under private ownership and with flexible access to capital, John Laing can take a longer-term view as an owner and operator of assets during the next phase of its growth.”

John Laing can trace its roots back to 1848 as a building company based in Carlisle.

It grew to become a major construction company with projects including the M1 motorway, Sizewell B nuclear power station and Coventry Cathedral.