Grupo Dragados' offer to pay ?21.25 per share represents a 60% premium on HBG's share price for the last 30 trading days, leading some analysts to suggest the bid was too generous.

The announcement came as ramifications of the recent merger of dredging companies HAM and Ballast Nedam continued to reverberate through the Dutch courts. A judge of the Enterprise Section of the Court of Appeal in Amsterdam had ruled that the supervisory and main boards of HBG 'mismanaged' by rejecting a bid for HAM by dredging rival Royal Boskalis Westminster without consulting HBG shareholders. Shareholders had favoured Boskalis' ?570m bid for HAM, which in turn would have seen Dutch construction company Heijmans purchase the remainder of HBG. Heijmans withdrew from the HBG purchase once the merger creating Ballast HAM Dredging was allowed to go forward.

The Dutch shareholders association VEB, which represents the majority of HBG shareholders, had welcomed the verdict and were considering a vote of no confidence which becomes irrelevant in light of Grupo Dragados' generous bid.

The takeover will see the end of the 100 year old Dutch group, whose member companies' ubiquitous green banner logos are a familiar sight at construction works across Europe. Retaining the name Grupo Dragados, the merged company will be based in Madrid and led by a management board consisting of four members from each group headed by Santiago Foncillas, the present Spanish chairman. There will be almost no geographical overlap in the merged groups. Former HBG member companies will continue to operate as normal.

MJ Information No: 16735