SNC-Lavalin Group considers breakup that would involve spinning out businesses like WS Atkins - report
08 MAY 2019
SNC-Lavalin Group [TSE:SNC], the Montreal, Quebec-based engineering, procurement and construction services company, is considering a possible breakup, The Globe and Mail reported on 7 May.
A report from the newspaper's website on Tuesday cited two people as saying that the company informed investors at a private luncheon last week that it is weighing the possibility of spinning out numerous businesses, such as WS Atkins in the UK, before its criminal case advances to the trial stage. The two people cited, including David Taylor from Taylor Asset Management, attended the Friday meeting that was hosted by TD Securities, according to the report.
Taylor said that the company referred to the possible breakup-move as "Plan B". This plan would focus on generating further value for stakeholders and spinning out some businesses.
Taylor added in the report that SNC, which bought WS Atkins in 2017 for CAD 3.6bn, informed investors that it believes that the company is valued at more than it was when bought.
Asked about last week's meeting, SNC spokesperson Daniela Pizzuto said in the report that the company continues to consider all possible alternatives to boost stakeholder value.
According to the report, Neil Bruce, CEO of the company, has been attempting to stop the SNC's stock value from falling after SNC announced last October that it would not be allowed to negotiate a settlement with federal prosecutors concerning bribery and fraud charges.
The company's market cap is CAD 4.89bn.
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