Bovis Homes has entered discussions again with Galliford Try over buying its housebuilding unit as well as its partnerships and regeneration division.
The firm is proposing an issue of Bovis shares to Galliford Try shareholders valued at £675m, alongside £300m paid in cash. It is also proposing the transfer to Bovis of Galliford Try’s 10-year debt private placement of £100m.
If the transaction proceeds, it is expected to value the companies’ housing businesses at £1bn.
The potential deal relates solely to a combination of Bovis Homes and Galliford Try’s housing businesses and does not relate to a merger with Galliford Try.
Greg Fitzgerald, chief executive of Bovis Homes, said: “While discussions are still at early stages, this potential combination represents an exciting and transformational opportunity to create a leading UK housebuilder with enhanced scale, well positioned to make the most of current opportunities and drive forward on our commitment to delivering high-quality homes and excellent service that our customers and housing partners deserve.”
Graham Prothero, chief executive of Galliford Try, added: “The transaction is an exciting opportunity to create two strategically focused businesses. The significant cash element within the consideration provides a firm foundation for our newly reorganised construction business to flourish as an independent company. The strong balance sheet and excellent fit between the combining businesses will be a superb platform for both private housebuilding and partnerships, creating a unique and well-positioned housing provider.”
Bovis proposed buying rival Galliford Try’s housebuilding business earlier this year for £950m before being rejected. In a statement in May, Bovis said it had offered the sum, along with the assumption of Galliford Try’s £100m 10-year private debt placement, in exchange for the firm’s Linden Homes and Partnerships & Regeneration businesses.
But Galliford Try had rejected the offer, arguing it was too low.
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