Contractor pulls out of bidding for Belfast schools as it emerges parent company may sell the business.
Morrison, the contractor and services company, has pulled out of the race for a £500m schools programme in Belfast, in the same week that it emerged that AWG, its parent company, was gearing up to sell the business.
Morrison had made it onto a shortlist of three for the £120m first phase of a project that involves a total of 83 schools. The other two firms were Amey and Bilfinger Berger.
A spokesperson for AWG confirmed that it had pulled out of the scheme, saying it was part of a wider decision to avoid projects that were purely facilities management provision with no construction.
He said: “We are focusing our FM resources on UK local authority repair and maintenance work.”
AWG has also appointed the corporate finance team at Close Brothers to look at possible options for Morrison. The most likely outcome of the review is a sale of the construction business, which is valued at about £200m.
AWG and Morrison have had an unhappy union from the outset. When AWG bought the contractor for £263m in 2000, the latter was forecast to make a £31m profit for the year to 31 March. However, it made a £46m loss and AWG started legal proceedings against the company’s founder Sir Fraser Morrison and former chief operating officer Stephen McBrierty, claiming they had fraudulently misrepresented the books.
Jonson Cox, AWG chief executive, is thought to have succumbed to shareholder pressure to sell the business, which is not core to AWG.
The spokesperson said: “No decision has been made,” adding that the options included a sale, a demerger of Morrison or no change.
Francesca Raleigh, support services analyst at investment bank Numis, said: “People will be interested in parts of Morrison but nobody is likely to want it whole.”
