Redrow’s merger move with Bovis knocked back
Flintshire-headquartered Redrow Homes Group has confirmed the rejection of an offer to merge its business with Bovis Homes.
Redrow said it made an initial approach to Bovis on February 27 when its share price was at £7.74 and subsequently made a merger proposal.
The offer consisted of £1.25 per Bovis share in cash and 1.32 new Redrow shares in exchange for each Bovis share representing a value of £6.59 per share based on Redrow’s share price of £4.99 on Friday, March 10.
“The board of Bovis informed Redrow on March 6, 2017 that the proposal did not merit further discussion,” a Redrow statement said.
“Redrow continues to believe the potential combination offers a compelling opportunity to create a combined business with the scale and operational strength to compete more effectively in the growing UK housebuilding market.
“The potential combination would offer a balanced geographic mix of revenue, including a complementary current land bank and forward land bank mix.
“Given that the proposal is largely in the form of Redrow shares, Bovis shareholders would be able to share, alongside existing Redrow shareholders, in the proven value creation skills of the Redrow management team.”
Kent-based Bovis has also turned down a similar approach from London-headquartered Galliford Try.
Galliford Try said it had offered a 7% premium on Bovis’ share price at close on Friday (March 10), offering £8.86 per share. and that – under Takeover Panel rules – they now had a month to submit a full takeover offer or walk away.
