Taylor Wimpey (Dusseldorf: 408518.DU - news) , one of Britain's biggest housebuilders, is poised to wade into the auction of Cala Homes, a Scottish rival, amid a revival of the sector's fortunes and a renewed appetite for consolidation.
I understand that Taylor Wimpey, which unveiled a three-fold rise in half-year profits in August, is considering tabling an offer for Cala, which during the 19th century became the first Scottish company to list on the London Stock Exchange (LSE: LSE.L - news) .
Cala has been put up for sale by the taxpayer-backed Lloyds Banking Group (LSE: LLOY.L - news) , which was left with enormous exposure to the declining fortunes of the British housing market when Lloyds TSB rescued HBOS at the height of the 2008 banking crisis.
Lloyds owns a large chunk of Cala's shares, with the rest held by employees.
The company, which returned to the black last year for the first time since 2007, is valued at approximately £250m, insiders say.
Expressions of interest in Cala, whose footprint is predominantly in Scotland and the Midlands, are understood to be due next week.
The auction is expected to draw interest from a number of other rival housebuilders as well as private equity groups.
Cala is one of several housebuilders in which Lloyds is attempting to shed an ownership stake.
The bank, which is 41%-owned by taxpayers, has also put Countryside up for sale, and last year sold its shares in Crest Nicholson to Varde Partners, a distressed investment fund.
Crest is now being prepared for a return to the stock market.
Taylor Wimpey’s interest in Cala reflects the transformation in housebuilders’ fortunes, prompted partly by an array of Government measures to stimulate the sector. Analysts expect a flurry of takeover activity in the sector during the next 18 months.
The auction of Cala is being overseen by bankers at Rothschild.
Taylor Wimpey declined to comment.