Could Persimmon be set for £1bn takeover of housebuilding rival Cala Group?

Monday 27 May 2024 12:33 pm

Persimmon said it is on track to build between 10,000 and 10,500 properties this year, in the latest signal of green shoots emerging in the market despite interest rates remaining high. 

Persimmon, one of the UK’s biggest housebuilders, is reportedly considering a £1bn bid for Cala Group, a rival firm which has been put up for sale. 

The FTSE 100 firm has been mulling a takeover of the company which was put up for sale in March by owners Legal and General.

Sources told Sky News’ Mark Kleinman over the weekend, Persimmon would be a “strong contender” to buy Cala, with other interested parties including fellow builders Travis Perkins and Avanti. 

The business, which is headquartered in Edinburgh, Scotland, has been fully owned by Legal and General for the past six years. 

The company originally bought a major stake in the firm back in 2013, before taking over the business completely in 2018. 

Cala reported a fall in profits during the half year, largely due to high interest rates destroying demand for new homes.

If the Cala sale is completed, it will represent the first major decision by Legal and General’s new chief executive Antonio Simoes.

It would also mark one of the biggest acquisitions for York-based Persimmon in a number of years. 

Shares in Persimmon are up around 20 per cent in the last year as the company has shown signs of resilience amid a downturn in building instructions. 

The firm said last month it is expecting to deliver between 10,000 and 10,500 completions for 2024, and it has full planning on 98 per cent of the homes.

Persimmon chief, Dean Finch, said: “Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged. Customers want quality homes in the places where they want to live and work, and affordability is crucial. 

“During the year we have continued to take further steps to strengthen the business and we are well placed to meet this demand through our three excellent brands offering different price ranges with overall private average selling prices that are below the market average.”

City A.M. has approached Persimmon and Legal and General for comment. 

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : CityAM – https://www.cityam.com/could-persimmon-be-set-for-1bn-takeover-of-housebuilding-rival-cala-group/