Construction firm Kier has said it is thinking about buying troubled infrastructure group May Gurney.

The announcement follows the news this morning that Costain was planning a £178 million merger with May Gurney, a deal which already has significant shareholder approval on both sides.

Kier has issued a statement to shareholders claiming a merger between it and May Gurney would generate more value.

The statement reads:

“Kier holds May Gurney in high regard and views it as a good quality support services business with a range of services which complements Kier's existing offering.

“Kier believes that a combination of Kier and May Gurney would create significant value for shareholders, establishing a market-leading and well-balanced business.  The enlarged group would offer an unrivalled range of services to Local Authorities as well as providing Kier with greater access to the regulated sector.

“To that end, Kier has made previous attempts to discuss a potential combination with May Gurney and has been monitoring the business' recent performance. In light of the announcement, Kier is considering its options.

“A further announcement will be made if and when appropriate. There can be no certainty that an offer will be made.”