News: PRN UPDATE 1-Australia's Perenti considers takeover of Downer mining arm

(Adds background on Downer's outlook and AFR story)

Feb 5 (Reuters) - Australian mining services provider Perenti Global Ltd (PRN) said on Wednesday it was considering buying Downer EDI's (DOW) mining servicing business, but dismissed a report of a A$700 million ($471 million) offer.

Downer is struggling with higher costs arising from loss-making construction contracts due to weak global business investment and a stuttering Australian economy.

The New South Wales-based firm slashed its profit forecast last month and flagged restructuring costs.

Perenti, formally known as Ausdrill, said the potential offer value of A$700 million reported http://bit.ly/2Us34sr by the Australian Financial Review was "significantly above" what was being considered.

If an offer is made, Perenti said it would consider funding options, including an equity raising.

On Monday, AFR said Downer was seeking offers for the division by the end of the week.

Downer did not immediately respond to a request for comment.

($1 = 1.4843 Australian dollars)