Dutch engineering consultancy group Arcadis ARCVF has attracted takeover interest from bidders including Canadian peer WSP Global WSP-T that view the company as undervalued, according to two people familiar with the matter.
Trading in Arcadis’ Amsterdam-listed shares was temporarily halted on Thursday after they jumped 9.5 per cent on news of interest, which was first reported by Reuters.
Montreal-based WSP, listed on the Toronto Stock Exchange, has held talks with advisers and conducted work on and off over the last year on a possible bid for Arcadis, whose market value is about €3.2-billion (US$3.64 billion), one of the sources said.
WSP, with a market value of $23.6-billion (US$16.75-billion), is an obvious suitor because, by combining operations, it could cut costs and boost revenue, the person added. Large-cap private equity firms have also explored a potential bid for Arcadis in recent months, the people said. The sources asked not to be named in order to discuss the private deliberations.
While the suitors are considering bids, an offer for Arcadis is unlikely to materialize quickly owing to potential hurdles including the company’s shareholder structure, said the people.
Responding to a request for comment, WSP’s CFO Alain Michaud told Reuters the company does not comment on speculation or rumours. A spokesperson for Arcadis declined to comment.
Founded in 1888, Arcadis, which has 34,000 employees, has become increasingly vulnerable to takeover interest as its growth has stalled and shares have lagged those of U.S.-listed peers. Despite the jump in late trading on Thursday, its shares are still down over 40 per cent from a peak of €66.85 reached in November, 2024.
Revenue at the firm was broadly flat at €933-million in the first quarter ended March 31, while operating EBITDA fell 5 per cent to €127-million, according to its quarterly results.
Lovinklaan, a foundation led and managed by employees, owns about 18 per cent of the company, according to its website, and could oppose a deal unless safeguards are put in place to protect employment and skills development, the sources said.
Any bidder would likely need to offer commitments to the shareholder to secure support, they said. Arcadis also has a relatively new management team led by chief executive Heather Polinsky, who started in March, and the board is waiting to assess whether she and other executives can improve its performance as a standalone company, the first person said. If the board ultimately loses confidence in their turnaround efforts, the likelihood of a transaction would increase, the person added.