February 25, 2011 / 1:14 AM / 8 years ago

Mouchel in advanced tie-up talks with Interserve - report

LONDON (Reuters) - Interserve IRV.L is in advanced talks with Mouchel MCHL.L over a tie-up that would create one of Britain’s biggest public sector outsourcing companies, the Financial Times said on Friday.

The newspaper said sources familiar with the deal told it Interserve, which cleans Britain’s crown courts, is expected to disclose as early as Friday that it had reach a “cooperation agreement” with its rival.

Mouchel on Thursday said it was in advanced talks with an unnamed potential buyer, sending its shares up 10.3 percent at 150.5 pence and prompting a denial from construction firm Costain (COSG.L) that it was the party involved.

Interserve is being advised by JPMorgan Cazenove.

The arrangement of financing is one of the conditions that needs to be met before Interserve launches a formal bid for Mouchel, the FT said, adding it was not immediately clear how the firm would finance the deal.

Mouchel and Interserve were not immediately reachable for comment.

Reporting by Karolina Tagaris; Editing by Gary Hill

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