Mouchel confirms takeover offers

Outsourcing firm Mouchel has confirmed it has received bid offers from unnamed suitors, sending its shares up 28%.

"The board does not believe that these preliminary approaches reflect the true value of the company," the group said.

Mouchel shares had fallen 80% this year as the UK government and councils reduce spending on new infrastructure development that the company provides.

The firm also said that it and its lenders had hired accountants Deloitte to carry out a review of the business.

Debt worries

The news comes amid worries that the firm, whose operations include road maintenance and consultancy to local authorities, will not be able to refinance existing loans from RBS, Lloyds Banking Group, and Barclays.

Mouchel said in a statement on its website that it expects the review to result in new medium-term loans to be ready by March.

However, it also said that it was reviewing other options for funding itself, including the spinning off of non-core assets.

In October, Mouchel reported a £14.7m annual pre-tax loss, on revenues down 15% to £632m, and cancelled its dividend.

It has also cut its headcount by more than 2,000 since the start of 2009.

"The steps we have taken to manage the business in the challenging conditions brought about by the post-election environment are proving successful," the company claimed in its statement, noting that its pipeline of new government contracts was slowly recovering.

In February, Mouchel received takeover interest from support services firm VT Group and engineers Babcock.

It shares closed up 15.75 pence at 72.25p.