Resurgent Housebuilder Miller Eyes £700m Sale

One of the final housebuilders to remain in the partial ownership of Britain's state-backed banks is preparing to explore a sale expected to value it at £700m.

Sky News has learnt that shareholders in Miller Group, one of the 10 largest players in the industry, have engaged bankers at Rothschild to explore options for the company.

Sources say that an outright sale is the likeliest outcome of the process although other alternatives, such as a stock market listing, may also be considered.

Miller has been controlled by GSO Capital Partners, a unit of the New York-listed private equity giant Blackstone (NYSE: BX - news) , since 2011.

The housebuilder's other shareholders include divisions of Lloyds Banking Group (Other OTC: LLOBF - news) and Royal Bank of Scotland (LSE: RBS.L - news) , with their holdings the legacy of the 2008 financial crisis, which left them as the biggest owners of housebuilding interests in Britain.

Sources said that a process to solicit interest in Miller was not imminent and that it would not get underway until after next month's referendum on the UK's membership of the European Union.

The Bank of England has been among those warning that UK house prices could fall sharply in the event of a vote to leave.

Miller's housebuilding business is focused on the regions outside London, while the wider Miller Group also has interests in construction and mining.

Announcing a surge in annual profits at Miller Homes in March, Chris Endsor, its chief executive, said: "Our investment in recent years, combined with new bank facilities, positions Miller Homes for further significant growth.

"We have the operational expertise and financial firepower to grow output by a further 50% to 3,250 units by 2019, and a business plan to deliver upper quartile EBITA growth over the next two years.

"Against favourable market conditions and our well defined growth plans, we are extremely excited about our future."

Miller is targeting an increase in annual construction to 3,250 homes a year by 2019, having been buoyed by Government support in the shape of the Help to Buy programme, which provides state-backed loans to purchasers of new homes.

The appointment of Rothschild comes just over two years after other advisers were hired to work on a strategic review of the business.

That process stalled, despite the company's strong performance.

Blackstone and Miller declined to comment on Friday.