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Monday 26 August 2019

Bovis no longer in talks over £950m deal for Galliford Try housing unit

The move would have led to a combination of the housing businesses, but Galliford Try rejected the offer.

Bovis Homes confirmed it is no longer in discussions to acquire rival Galliford Try’s housing business (PA)
Bovis Homes confirmed it is no longer in discussions to acquire rival Galliford Try’s housing business (PA)

By Henry Saker-Clark, Press Association City Reporter

Housebuilding giant Bovis Homes has confirmed it is no longer in discussions to acquire rival Galliford Try’s housing business, after a deal worth £950 million was rejected last week.

Galliford Try said on Saturday that it had rejected an offer from Bovis, but Bovis has now confirmed the two are no longer in discussions regarding a potential deal.

Bovis submitted an offer for its competitor’s Linden Homes and Partnerships & Regeneration businesses on May 8, for £950 million with the assumption of Galliford Try’s 10-year debt private placement of £100 million.

The move would have led to a combination of the housing businesses, but Galliford Try rejected the offer on Friday, arguing that it “did not believe that the proposal fully reflected the value of the housing business”.

It said the move would also not reflect “the need to ensure that the remaining Galliford Try UK listed construction focused group had a viable capital structure”.

The deal would have left Galliford an independently listed company focused on construction.

Galliford said it “remains confident in the long-term prospects of the group”, after rejecting the offer.

The firm announced plans last week to cut up to 350 jobs amid an overhaul of its under-pressure construction business.

It added that the profit hit from restructuring the division will be at the top end of its expected range.

The two firms are no longer in discussions, Bovis said, but The Times reported that the FTSE 250 housebuilder in considering whether to line up a fresh bid.

The news comes two years after full merger talks between the two housebuilders collapsed. Galliford attempted to acquire Bovis but talks broke down after the pair failed to agree on a valuation.

Shares in Galliford Try jumped 6.5% to 573.5p in early trading.

Meanwhile shares in Bovis remained steady, rising 0.35% to 998p following the announcement.

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