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Bovis revisits deal for Galliford’s divisions
Posted on Tuesday, 10 September 2019 10:07
Bovis Homes has reinitiated discussions to acquire the Linden Homes and Partnerships & Regeneration divisions of Galliford Try after sweetening an earlier, rejected offer to GBP 1.08 billion.

Consideration would comprise GBP 675.00 million-worth of new shares, GBP 300.00 million in cash and the assumption of a ten-year debt private placement of GBP 100.00 million.

Bovis said it would finance the money portion of the acquisition via an accelerated bookbuild comprising almost 10.0 per cent of its existing equity, as well as by using resources on its existing balance sheet.

Although the two have agreed upon “high-level terms”, talks are at an early stage and significant work still needs to be completed before definitive documentation can be drawn up.

This includes due diligence, arranging funding, finalising the potential cost-savings, approval for the transfer of Galliford’s debt private placement, and a potential placing and raising of additional debt by Bovis.

An upside of the acquisition would be an improved housebuilding platform with which to compete more effectively in the UK sector.

It should also accelerate Bovis’ “move into the higher growth partnerships and regeneration markets” and establish “a complementary geographical footprint and strategic land bank”.

Galliford Try would be a well-capitalised, UK-listed construction-focused group with strengths in building and infrastructure, particularly in the highways and water sectors.

Bovis tabled its first offer for the two divisions in May, but its GBP 1.05 billion proposal, which included debt, was rebuffed as being too low and not in the shareholders’ best interests.

Linden had operating profit of GBP 76.80 million on revenue of GBP 392.10 million in the six months ended 31st December 2018.

Partnerships & Regeneration had contracting of GBP 186.90 million, mixed-tenure of GBP 98.00 million and operating profit of GBP 14.50 million in H1 2019.

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