Mouchel fights to repel Costain

Struggling business services group Mouchel has rejected an improved takeover approach worth about £148 million from construction firm Costain.

Mouchel, whose operations range from highway maintenance to consulting for local authorities, has been hit hard by government cutbacks and has embarked on a strategic review after warning it may need fresh funds if it fails to reach a refinancing deal with its banks.

But it said that Costain's latest approach significantly undervalued the business. Mouchel's shares rose 18.6 per cent to 127.75p.