Bovis float plan hit

By DAILY MAIL REPORTER
Updated:

 

Hopes of a trouble-free float for construction group Bovis have taken a knock following the launch of a multi-million pound legal action by one of its key clients.

The P & O-owned construction group, which plans to join the stock market later this year, is being sued for £30 million by Venetian Casino Resort, an American company building a hotel in Las Vegas.

If Bovis loses, it could be forced to pay out millions, possibly, hitting its stock market value.

The writ is the second time in a year Bovis has hit trouble with the Nevada casino project, coming hard on the heels of a $1.5 billion (£900 million) action from a disaffected former employee claiming missed deadlines.

In the latest US writ, VCR claims Bovis ran up extra costs on the project by producing 'false and misleading schedules', due to its alleged negligence.

It adds that the cost of the hotel has overshot by at least £70 million, running up to £430 million instead of the agreed £360 million.

The hotel project is a new complex in Las Vegas modelled on the city of Venice. It will include a casino and thousands of bedrooms.

The group has been rapidly stepping up its international expansion in recent months in a bid to boost its value ahead of a flotation in the autumn.

Two months ago, it revealed plans to gain its first foothold in Argentina.

The stock market float follows a decision by its parent company P&O to spin off all its non-maritime assets.

Analysts reckon it could be valued at up to £350 million because of its position as one of the top 10 construction companies in Britain and annual sales of £328 million.

However, any damaging legal action could threaten the value of the float, because Bovis may be forced to make as-yetunknown provisions if it loses.

Bovis denied the legal claims, pinning the blame instead on its troublesome client, according to Construction News.

A spokesman said: 'We've been asked to make numerous changes on the hotel by the client - we're in the final stages of negotiating the bill, and US firms are much more likely to turn to their lawyers.'

Bovis came close to merging with WS Atkins earlier this year, a move which would have created a construction colossus with sales approaching £3 billion.

However, the talks later collapsed.

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