Redrow abandons Bovis merger talks

House builder Redrow has walked away from talks to merge with Bovis Homes after an initial approach was rejected by the southern house builder.

This morning Redrow said it would not be in its shareholders’ best interests to increase its proposal above the level which was rejected by the board of Bovis.

Its share and cash offer would have given Bovis a 32.4% stake in a merged house building business.

The move leaves Galliford Try as the last remaining bidder still in discussions although its initial approach was also rejected by the Bovis board.

Galliford Try’s current offer values Bovis at £1,191m and would make Galliford Try the 52.25% majority shareholder in the merged group.

Under City takeover rules the firm now has until April 9 to make a firm offer for Bovis.

In a statement this morning Redrow said: “We will instead continue to focus on its highly successful organic growth strategy that has delivered approximately 55% compound annual growth in pre-tax profits from financial years 2012 to 2016.

“Redrow’s strong land bank and disciplined approach to its operations means it is well-placed to both continue to grow its profits and progressively increase dividend payout rates to 33% in the medium term.”

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