Carillion’s shares jump 20% on reports of a Middle East bid

Shares in Carillion jumped around 20% on Wednesday after reports of a Middle Eastern bid for the ailing company.

The Wolverhampton-based group has been in crisis throughout the summer, with Tuesday’s closing price giving the group a market value of just £200m, despite it having more than 30,000 employees and revenues last year of £4.4bn.

The construction group, which has seen its share price be on a downward trend since early 2015 when it had a market value of more than £1.5bn, issued a major profit warning in early July and chief executive Richard Howson stepped down. Shares crashed 75% in three days, then plateaued, which made the group’s subsequent relegation from the FTSE 250 inevitable.

On Wednesday morning City AM reported that a bidder is preparing a letter of interest to submit to Carillion and its advisers EY, but is waiting for the details from a scheduled trading update this Friday before making a firm decision.

The news caused a sharp rise in Carillion’s share price, climbing 20% in early morning trading then holding steady, albeit from its very low base.