UK housebuilder Galliford Try has rejected a merger offer from competitor Bovis Homes after media speculation was rife over the weekend
Bovis Homes approached Galliford Try in an attempt to restart negotiations over a potential deal which would leave the two companies sharing a number of operations.
Bovis wanted to purchase the housebuilder’s Linden Homes and its Partnerships & Regeneration businesses and intended to issue new shares to fund the deal, through which Galliford would have remained an independently listed company focused on construction.
In a trading statement on Saturday (25 May), Galliford said it had rejected Bovis’s offer, saying “it does not fully value the Linden Homes and Partnerships & Regeneration divisions and is not in the interests of all shareholders”.
Bovis Homes said: “Bovis Homes confirms that following an initial proposal, some preliminary discussions and the receipt of some high-level financial information from Galliford Try, Bovis Homes submitted a revised proposal (subject to detailed due diligence) on 8 May 2019 regarding the potential combination of Bovis Homes and Galliford Try’s Linden Homes and Partnerships & Regeneration businesses for consideration of £950m together with the assumption of Galliford Try’s 10-year debt private placement of £100m, with the consideration to be satisfied via the issuance of new Bovis Homes shares directly to Galliford Try shareholders.”
Galliford Try rejected the proposal from Bovis Homes on 24 May and the two companies are no longer in discussions.
The proposal comes two years after previous merger talks between the two companies failed. The housebuilder attempted to buy its larger rival but was turned down after the two groups failed to reach an agreement on valuation.