Bovis rebuffs takeover bids as 'undervaluing' the company

Hamish Champ

The housebuilder confirmed that Redrow and Galliford Try had made cash-and-shares and all-share offers respectively

Bovis Homes has confirmed that it has rebuffed two bids for the company, arguing that “neither reflected the underlying value of the business”.

The housebuilder said today that Redrow and Galliford Try had made cash-and-shares and all-share offers respectively for the company.

It rejected outright the Redrow offer, which proposed £1.25 per Bovis share in cash and 1.32 new Redrow shares in exchange for each Bovis share, equating to £6.59 per Bovis share based on the Redrow share price of £4.99 on 10 March 2017.

However Bovis said that discussions with Galliford Try, whose all-share merger valued its target at a 7% premium to the former’s share price at the end of last week, were “ongoing”.

Galliford Try said among the advantages its proposed offer for Bovis shareholders would be the creation of a new major housebuilder “with national scale and geographic coverage through the combination of the 6th and 8th largest UK housebuilders by completions”.

Under Stock Exchange rules it has until 9 April to make a firm offer or ‘walk away’.

Redrow argued that the potential combination “would offer a balanced geographic mix of revenue, including a complementary current land bank and forward land bank mix”.

Last month Bovis announced a 3% fall in annual pre-tax profits, down to £154.7m on turnover of £1,055m.

It also revealed it was making what it called a “one-off £7m customer care provision” after a high level of customer service issues, including buyers moving into newly built homes that suffered from problems including electrical and plumbing faults.

The group is still looking for a chief executive after the departure of David Ritchie in January.

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