Balfour Beatty Rejects Improved Carillion Offer
The Board of Balfour Beatty has rejected Carillion’s revised merger proposal after consulting with major shareholders.
The offer had valued Balfour at £2.1bn, and offered shareholders 58.3 percent of the combined entity with a dividend of 8.5p per share. It also proposed that three Balfour non-executive directors would sit on the new board and that it would cover “reasonable costs” of the remaining bidders for Parsons Brinckerhoff up to £10 million in aggregate if the merger and therefore the sale did not go ahead.
However, Balfour said the revised proposal failed to address its two key concerns: “the considerable risks associated with the proposed business plan, including the strategy to significantly reduce the scale of the UK Construction business when it is poised to benefit from a recovery in the market; and the continued intention to terminate the sale of Parsons Brinckerhoff at a point when it is reaching a successful conclusion.”
The company said its shareholders had unanimously decided to reject the offer and not seek an extension to tomorrow’s deadline to conclude the deal. It added that the value change to the first offer was “small”.
The Board added that it would now focus on delivering its standalone strategy, prioritising the Parsons Brinckerhoff sale; the appointment of a new CEO, restoring value to the UK construction business, realising further indirect overhead savings and shared service efficiencies across the Group; and publishing an updated valuation of the PPP portfolio which takes into account current market conditions.
Carillion’s board continues to believe in the strategic logic of a merger, and that its merger proposal could save at least £175 million per year by the end of 2016, while enhancing earnings significantly from that year.
On making the revised offer, Philip Green, Chairman of Carillion, had said: “Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the Board of Carillion remains committed to moving forward in a constructive and collaborative way with the Board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies.”
Yet a successful deal at this late hour now seems unlikely.
Why engineers must always consider human-induced vibration
Human induced vibration, or more accurately vibrations caused by human footfall, often conjures images of Millennium Bridge-style swaying or collapsing buildings.
But in reality, the ‘damage’ caused by human-induced vibrations is less likely to ruin a structure and more likely to cause discomfort in people. Though not as dramatic as a structural failure, any good engineer wants to make sure the people using their structures, be it bridges or buildings or anything in between, can do so safely and comfortably. This is why human-induced vibration must be considered within the design process.
Resonance v Impulse
There are two ways that human-induced vibrations affect structures: resonant, and impulse or transient response. Put simply, resonance occurs when Object A vibrates at the same natural frequency as Object B.
Object B resonates and begins to vibrate too. Think singing to break a wine glass! Although the person singing isn’t touching the glass, the vibrations of their voice are resonating with the glass’s natural frequency, causing this vibration to get stronger and stronger and eventually, break the glass. In the case of a structure, resonance occurs when the pedestrian’s feet land in time with the vibration.
On the other hand, impulse or transient vibration responses can be a problem on structures where its natural frequencies are too high for resonance to occur, such as where the structure is light or stiff. Here the discomfort is caused by the initial “bounce” of the structure caused by the footstep and is a concern on light or stiff structures.
Engineers must, of course, design to reduce the vibration effects caused by either impulse or resonance.
Potential impacts from human induced vibration
Human induced vibration can lead to a number of effects upon the structure and its users. These include:
- Interfering with sensitive equipment Depending on the building’s purpose, what it houses can be affected by the vibrations of people using the building. Universities and laboratories, for example, may have sensitive equipment whose accuracy and performance could be damaged by vibrations. Even in ordinary offices the footfall vibration can wobble computer screens, upsetting the workers.
- Swaying bridges One of the most famous examples of human-induced resonance impacting a structure occurred with the Millennium Bridge. As people walked across the bridge, the footsteps caused the bridge to sway, and everybody had to walk in time with the sway because it was difficult not to. Thankfully, this feedback can only occur with horizontal vibrations so building floors are safe from it, but footbridges need careful checking to prevent it.
- Human discomfort According to research, vibrations in buildings and structures can cause depression and even motion sickness in inhabitants. Tall buildings sway in the wind and footsteps can be felt, even subconsciously by the occupants. It has been argued that modern efficient designs featuring thinner floor slabs and wider spacing in column design mean that these new builds are not as effective at dampening vibrations as older buildings are.
- Jeopardising structural integrity The build-up of constant vibrations on a structure can, eventually, lead to structural integrity being compromised. A worse-case scenario would be the complete collapse of the structure and is the reason some bridges insist that marching troops break step before crossing. Crowds jumping in time to music or in response to a goal in a stadium are also dynamic loads that might damage an under-designed structure.
How to avoid it
As mentioned, modern designs that favour thinner slabs and wider column spacing are particularly susceptible to all forms of vibration, human-induced or otherwise, but short spans can also suffer due to their low mass. Using sophisticated structural engineering software is an effective method for engineers to test for and mitigate footfall and other vibrations at the design stage.