LONDON (Reuters) - British infrastructure group Balfour Beatty (L:BALF) said on Friday it had rejected a 1 billion pound ($1.6 billion) offer from John Laing Infrastructure Fund (L:JLIF) for its public-private partnership assets.
The non-binding proposal from the fund, an investor in hospitals, roads and schools, was made on Monday. Balfour said it fell significantly short of its own valuation of the portfolio.
The offer follows a troubled couple of years for Balfour, during which it has issued a string of profit warnings, fended off takeover approaches from rival Carillion (L:CLLN), and named defence firm Qinetiq's (L:QQ) boss Leo Quinn as its new chief executive, charged with turning around the firm.
In August, Balfour increased the valuation of the portfolio by 46 percent to 1.05 billion pounds, in part reflecting Britain's economic recovery, but said on Friday the future strength of the market meant its actual value was "substantially in excess" of that figure.
The company said it intended to publish an updated valuation in January, which would take into account recent contract wins, further investments and disposals, and its investment pipeline.
Balfour said the portfolio and its team played important roles within its other construction and support services arms, and said any proposal would need to reflect that.
Separately, Balfour said key findings from a review by accountancy firm KPMG of its struggling British construction business were expected to be announced in late January.
Shares in the firm, down 30 percent on a year ago, were up 0.8 percent in early trade, valuing the business at around 1.3 billion pounds.
(Reporting by Neil Maidment; Editing by Karolin Schaps and Jane Merriman)