Bovis and Galliford Try rekindle £1.1bn merger deal
Galliford Try has reached a preliminary agreement to merge its Linden Homes and Galliford Try Partnerships businesses with Bovis homes, in a deal worth nearly £1.1bn.
Bovis is proposing to pay £300m in cash, with a further transfer of a £100m private debt placing to Bovis. The rest of the offer consists of a £675m share issue of new Bovis shares to existing Galliford Try shareholders on a pro rata basis.
Galliford Try rejected a £950m bid from Bovis for the businesses in May this year arguing at the time that it “did not fully value” the companies.
But the firm, which recently undertook a restructure of its construction business and cut 350 jobs after struggles on the £1.35bn Queensferry Crossing joint venture and the delayed Aberdeen Western Peripheral Route (AWPR), said Bovis’s new proposal would leave it with a “well-capitalised” standalone construction group.
The proposal will now be taken forward for the approval of both sets of shareholders, with a view to completing a transaction in the coming months.
Graham Prothero, chief executive of Galliford Try, said: “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.
“Much remains to be done before we can present all the details to our shareholders and wider stakeholders. However, if completed, this deal will generate significant value for shareholders and a bright future for all three of our businesses.”