Shares in housebuilders soared yesterday amid expectations that Wilson Bowden, Britain’s fifth-largest, could become the focus of a £2 billion takeover battle, triggering further consolidation in the sector.
On Sunday the company confirmed that it was in preliminary discussions with a number of groups.
“These discussions are at a very early stage and there can be no certainty they will lead to a formal offer being made for the issued share capital for the company,’’ the group said.
Its rivals George Wimpey, Redrow and Bellway are all believed to be interested, while HBOS, Britain’s biggest mortgage lender, and several private equity bidders are thought to be looking. HSBC has been retained to handle the sale.
Shares in Wilson Bowden rose 267p to £20.98, valuing the company at just under £2 billion.
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The approach has triggered speculation about a fresh round of consolidation in the housebuilding sector. Colette Ord, an analyst at Numis Securities, said: “UK housebuilders with strong land banks are highly attractive because of the continued lack of supply of new UK homes and rising demand.”
Buyers are also attracted by the strong cashflows and historical undervaluation of housebuilders.
David Wilson, Wilson Bowden’s reclusive chairman and founder, hired the investment bank NM Rothschild in July to review his family’s 33 per cent stake in the business. Any deal will require his agreement.
Shares in other British housebuilders also rose yesterday. Persimmon, the largest company in the sector, was up 6p to £13.87. Shares in George Wimpey were at 520½p, up by 1½p.