A merger between British housebuilders Redrow (LON:RDW) and Bovis (LON:BVS) is off the table, after Redrow said it would not make a higher offer than the one rejected by Bovis earlier this month.
Redrow said it was”not in its shareholders’ best interests to increase its proposal”, choosing to walk away from the deal and clearing the way for rival Galliford Try make a higher offer.
Bovis rejected Redrow’s initial share and cash offer, saying it did not “underlying value of the Bovis business”. This statement came despite increasing criticism over the quality of Bovis’ homes and a shock profit warning in December, as well as a Facebook group set up buy homeowners accusing the company of pressuring them to move in to unfinished homes so it could hit sales targets.
Bovis also rejected an offer from Galliford Homes, who offered a 7 percent premium on the day’s share price at £8.86 per share. Bovis have seen their share price struggle to recover from the impact of Brexit, and are currently trading down a further 1.55 percent in the wake of the news of the takeover offer rejection (1437GMT).
In the wake of Brexit, David Ritchie, Bovis’s chief executive, said: “There was a sense of uncertainty over whether [buyers] should move forward … We’ve all gone through a rollercoaster of emotions over the last six weeks. There was a bit of a blip but as things stabilised they got back on with their lives and that is what we are seeing.”