May Gurney Integrated Services – 230p

27 March 2013 - merger with Costain

The company has announced that it is to merge with Costain in an all-share merger with shareholders receiving 0.8275 of a new Costain share for every share held.  With Costain shares currently trading at 285p, this values each May Gurney share at 235.8p.  Shareholders in May Gurney will also receive a second interim dividend of 5.6p.  Clearly, those readers who want to accept Costain shares should hang on and accept the offer, but despite the fact that the current  share price is below the intrinsic value of the offer we would suggest that other readers take profits.  Shares in Costain have risen strongly over recent months (they were 187p last June) and any weakness in the share price of that company will obviously have a negativre impact on the May Gurney share price as there is no cash alternative.  TAKE PROFITS.

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