SNC Lavalin rises on takeover rumors

SNC Lavalin rises on takeover rumors
Spain’s Grupo ACS and Australia’s WorleyParsons have shown interest in buying SNC and the former is already one of its business partners.

Shares of SNC-Lavalin Group (TSE:SNC) were trading 2.15% higher this afternoon on takeover rumors.

Two foreign companies have informally approached SNC-Lavalin engineering according to Wednesday’s edition of the Financial Post.

Spain’s Grupo ACS and Australia’s WorleyParsons have shown interest in buying SNC and the former is already one of its business partners.

The buyers are aware that SNC risks being banned from soliciting public contracts for 10 years, should it be found guilty of corruption over the company’s activities in Libya in the period preceding the collapse of the Qadhafi regime in 2011. These have drawn the attention of the Royal Canadian Mounted Police, which laid charges.

The Financial Post has noted that the Montreal based engineering and consulting company has not been receptive to potential buyers.

SNC’s first quarter results beat expectations by a wide margin, reporting 10 percent higher profits thanks to energy sector and cost reductions. Earnings per share were C$0.68, up 8%, while analysts expected earnings per share of C$0.36.

In addition, thanks to its available liquidity, SNC announced it would buy back up to 10% of outstanding shares after June 5 and until the end of the year.

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