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Galliford Try rejects Bovis offer for house building arm

(c) Sky News 2019: <a href="http://news.sky.com/story/galliford-try-rejects-bovis-offer-for-house-building-arm-11729924">Galliford Try rejects Bovis offer for house building arm</a>
 

Galliford Try has rejected a £950m offer from Bovis to buy its house building business.

The two firms confirmed that Bovis had made an approach for Galliford's Linden Homes and Partnerships and Regeneration divisions, confirming a story first reported by Sky News .

Galliford said it had "carefully considered" the proposal but decided it did not fully reflect the value of the operation.

Bovis said the two companies were no longer in discussions.

Valued at £1.3bn and £550m respectively, Bovis and Galliford Try are among the top 10 house builders in the UK.

Shares in Galliford climbed 6% on Tuesday after details of the abortive talks were disclosed.

Any deal would have seen it remaining as an independent UK-listed group focused on construction.

Galliford Try's construction division was behind a recent profit warning for the group.

It said last month that it would take a writedown of up to £40m on the unit because of costs relating to the Queensferry Crossing road bridge in Scotland.

That multimillion-pound hit was the latest example of pain being inflicted on UK construction groups, with‎ Kier recently replacing its chief executive and finance director in the wake of an embarrassing reception for a rescue rights issue.

The collapse of Carillion last year and the travails of Interserve, which owns a poorly performing construction business, underlined the crisis engulfing large swathes of the sector.

Last week, Galliford Try said it would cut up to 350 jobs in its construction arm as part of a plan to streamline its focus.

The approach from Bovis is a reversal of the situation in 2017, when Galliford Try ‎sought to take over its then-smaller rival.

Bovis eventually rejected offers from both Galliford Try and Redrow, another housebuilder, and recruited Greg Fitzgerald, Galliford Try's former boss, as its chief executive.