Ferrovial SA (FRRVY.PK), a Spanish infrastructure company, is in advanced talks to raise its bid for Australia's Transfield Services Ltd (TSE.AX), according to reports citing people familiar with the matter.
The reports indicated that Ferrovial carried out due diligence on Transfield's assets and plans to boost its offer to between A$2.00 and A$2.05 per share imminently.
On October 20, 2014, Transfield Services said it received an indicative, non-binding and conditional proposal from Ferrovial Servicios, S.A. to acquire 100 per cent of the issued shares in Transfield for cash consideration of A$1.95 per share, less the value of any dividends or other distributions after 17 October 2014.
Diane Smith-Gander, Transfield Services Chairman, then said, "The Board of Transfield Services has considered Ferrovial's proposal with the Company's advisers and has formed the view that the price of $1.95 per share does not reflect the underlying value of Transfield Services shares."
On November 12, Transfield Services announced that the confidentiality agreement had been executed with Ferrovial Servicios SA, allowing Ferrovial to conduct limited due diligence of Transfield Services.
Limited due diligence comprised substantial, relevant, commercially sensitive and non-public informaton, which will allow Ferrovial to determine whether an offer representing better value for Transfield Services shareholders can be put forward.
Given the commercially sensitive nature of information provided, the agreement also contains a standstill preventing Ferrovial trading in Transfield Services shares until 28 February 2015.
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