Builders battle to take control of Bovis Homes

TROUBLED developer Bovis Homes has rebuffed two takeover bids as rivals battle to seize the wounded business.

Bosses have knocked back approaches from both Galliford Try and Redrow on the grounds they were undervaluing the company.

The latter has said it could not improve on the cash-and-shares deal which had already been offered – although it stressed the proposal was still on the table.

Galliford, meanwhile, is offering around £1.2bn in shares to the company’s investors. It is now locked in talks with Bovis as the pair seek a way forward.

The potential deal is likely to be music to investors’ ears after a torrid nine months, with shares down more than 19pc since the eve of the Brexit vote.

Bovis has also become mired in a scandal over poor-quality houses rushed up in a bid to get them sold ahead of financial reporting deadlines.

Some outraged buyers were even offered £3,000 to move into unfinished properties so staff could hit their targets.

At the end of December, Bovis admitted the completion of 180 homes would be ‘deferred’ into early 2017 – meaning annual profits for 2016 would be lower than previously expected. Less than two weeks later, boss David Ritchie suddenly quit.

The firm is currently without a chief executive and asked finance head Earl Sibley to fill in on a temporary basis.

In February, Bovis announced it was setting aside £7m to compensate buyers who had moved into shoddy premises.

The company first received an offer from Redrow worth 814p per share on February 27. A week later, Bovis told the suitor that this proposal ‘did not merit further discussion’.

Galliford made an offer of 886p per share and talks are continuing.

The two bidders now have until April 9 to make a formal offer under takeover rules.

Galliford said its proposal would lead to a merger between the UK’s sixth and eighth largest developers, creating ‘a new major housebuilder with national scale and geographic coverage’. It also stressed the potential for cost savings. The pair’s combined value is around £2.4bn.

Redrow said: ‘We continue 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.’