Amec says £1.5bn offer from First Reserve Corporation and Texas Pacific undervalues the company

Construction and engineering group Amec has rejected a takeover approach, thought to value it at £1.5bn, from a private equity group.

Amec said the approach from First Reserve Corporation and Texas Pacific Group "significantly undervalued the company".

The offer is thought to be worth 450p a share.

Australian mining group Downer EMI made a bid for Amec in the summer, believed to be worth 446p a share.

The latest offer is part of an emerging trend of private equity firms keen to break into the infrastructure sector, after Henderson Equity Partners made a £1bn offer for John Laing.

Laing has already recommended a £957.5m offer from German insurer Allianz, which itself had trumped an initial £886.9m offer from Henderson.