Published: 13:00, 20 March 2017
One of the largest investors in Bovis Homes has urged the troubled housebuilder to ditch its merger talks with Galliford Try in favour of a deal with Redrow Homes.
Royal London Asset Management wants the New Ash Green-based company to pursue a deal with housing-focused Redrow rather than its rival bidder, which also works in construction.
Last week, Bovis revealed it had rejected merger attempts by both firms but said it was still in discussions with Galliford Try.
Richard Marwood, a fund manager at Royal London Asset Management, told the Sunday Telegraph: “It would be potentially neater to do it with Redrow because it’s a pure housebuilder.
“It looks a cleaner deal. Obviously the level of the Redrow offer was less attractive than the Galliford offer so it would need to be increased.”
Bovis’ shares grew by more than 10% to 918p last week following the news of the merger bids.
Redrow had valued the company at 814p a share and would have given Bovis shareholders 32.4% of the new company with its cash and shares offer.
Bovis claimed it was told it is not willing to improve its terms.
Galliford Try, meanwhile, made an all-share merger proposal of 886p per share which would have given the Kent firm’s shareholders 47.75% of the new group.
The offers came after Bovis reported lower-than-expected annual pre-tax profits of £154.7 million last month and plans to set aside £7 million to pay compensation to customers after missing construction targets.
It is on the hunt for a new chief executive after its boss of eight years David Ritchie quit following profit warnings.
Redrow declined to comment.
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