LONDON: House builder Persimmon Plc. is bidding to acquire smaller rival Westbury Plc. The deal, if it goes through, would create a house building behemoth in Britain.
Sources close to the negotiations said Persimmon is offering 550 pence to 560 pence a share, or about 630 million pounds to 645 million pounds.
Both the companies have confirmed that they are in talks with Westbury not disclosing about the suitor.
York-based Persimmon is currently Britain's biggest housebuilder by market value. It said it is looking at buyouts in order to have economies of scale such as better prices from suppliers. The housing sector is now emerging from a state of inertia and after the August rate cut by the Bank of England.
Persimmon builds on an average 12,000 houses a year and adding the capacity of 4,000 houses by Westbury can make the company march ahead of market leader Barratt Developments, which builds about 14,000 houses.
Westbury has been an acquisition target as it did not have critical mass. It had reported a 26 per cent fall in first half pre-tax profit, which stood at 45.5 million pounds. The company has been spending more on marketing and offering bigger incentives at a time when labour and raw material costs are on the rise.
Posted
on : Sat, 12 Nov 2005 10:20 GMT | Business News
By : Mike Lawson
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