Bid battle on cards as US firms set sights on Scott Wilson

Design and engineering consultancy Scott Wilson is at the centre of a potential takeover battle after the UK group accepted a bid from one US firm, while a second American company said it was considering making a cash offer.

Scott Wilson yesterday accepted a 161 million approach from San Francisco-based engineering consultancy URS.

But the prospect of a bidding war boosted shares by 112 per cent after it emerged CH2M Hill, a second US firm, was considering a bid for the firm, having carried out due diligence.

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CH2M Hill snapped up a 13 per cent stake in Scott Wilson, acquiring 9.5 million shares at 245p each.

There is no certainty that an offer will come from CH2M, while analysts at Panmure Gordon said there was a "good chance" of the URS deal going through.

After the London market closed, URS issued a statement saying it was considering its options in relation to the deal.

Scott Wilson has 5,500 staff, including about 3,000 in the UK, working across engineering projects including railways, roads and buildings.

The group also unveiled a near-doubling of pre-tax profit, up to 18m in the year to 2 May from 9.4m in the previous year.

Turnover fell from 360m to 340m but the percentage of business from overseas markets rose from 31 per cent to 37 per cent, boosting profits.

Chairman Geoff French said: "Despite the recent severe economic conditions in many of our markets, Scott Wilson has achieved record profit levels as well as erasing our net debt. "These achievements demonstrate the resilience of our business model and our ability to manage the business effectively in a challenging market."

Despite "strong" global demand for the group's infrastructure services, French said he did not expect growth from the UK business during the current financial year.

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Scott Wilson's projects in Scotland have included the Clackmannanshire Bridge, for which it won a Saltire Society Award, the Airdrie to Bathgate rail link and the M77 motorway. The company has five offices north of the Border.

Martin Koffel, chairman and chief executive of URS, said the acquisition of Scott Wilson would be an "important step forward" in its strategy to expand into the UK market.

He said the American firm had also been attracted by the British company's operations in overseas markets.

Koffel said: "Scott Wilson's market sectors are also well aligned with URS' existing focus. In addition to its strong infrastructure practice, Scott Wilson is well positioned in the environment and resources sectors."

Shares in Scott Wilson closed up 133.5p at 253p.