viewVistry Group PLC

Bovis Homes seals £1.1bn deal for Galliford Try's housing arm

Bovis will carry out a placing today equivalent to 10% of its shares to fund the £300mln cash element of the deal,

Bushveld Minerals Limited -
Galliford shareholders end up with 29% of the enlarged group.

Bovis Homes PLC (LON:BVS) has agreed terms for the acquisition of Galliford Try’s (LON:GFRD) Linden Homes and affordable housing arms.

The £1.08bn price will be met through cash and shares with Galliford shareholders ending up with 29% of the enlarged group.

Bovis will carry out a placing today equivalent to 10% of its shares to fund the £300mln cash element of the deal, which will also see £10mln of debt transferred to the enlarged business.

Greg Fitzgerald, Bovis chief executive, said the deal creates a leading UK housebuilder with an enhanced customer proposition and the ability to increase delivery to more than 12,000 new homes per year.

Brokers, though, were more sceptical about its merits.

Robin Hardy, an analyst at Shore Capital said that the move to enlarge the housing business does not really add any value.

“The housebuilders still believe, despite years of evidence to the contrary, that becoming a bigger housebuilder makes you a better housebuilder, but it doesn’t – it just makes you bigger.

“The only real attraction for Bovis investors remains the partnership housing business which has the scope to raise the quality of earnings, align with a growth market and lower development/sales risk.”

Bovis shares were unchanged at 1.162p, while Galliford Try eased 3% to 721p.

Quick facts: Vistry Group PLC

Price: 544 GBX

Market: LSE
Market Cap: £1.21 billion

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