Bryant battle foreshadows shake-up in housebuilding

Housebuilders seize on stock market support to fund their power plays Lucy Coppin The bitterly fought battle over Bryant Group is likely to be one of a series of mergers in housebuilding over the coming months. Charterhouse Securities property analyst Hugh Rich said consolidation was set to gather pace. “We’ve seen a considerable move in interest rates and that has whetted companies’ appetites to take over other companies. “Stock market placements to raise funds are going to be supported reasonably well in the current climate.” Bryant and Beazer last month announced plans to merge to form the UK’s second biggest housebuilder, with a market cap of £969m (see table). But Taylor Woodrow also wants to take over Bryant, and Persimmon was expected to make an indicative offer for Beazer by 19 January. Last week, Bryant snubbed a £512m conditional takeover offer from Taylor Woodrow, saying it was insufficient, and urged shareholders to accept the preferred offer from Beazer. It also rejected a raised formal offer from Taylor Woodrow. The offer of 75p in cash and 0.7 new Taylor Woodrow shares for each Bryant share put a value of around 195.1p on each Bryant share. The offer valued Bryant at £523m. The offer was conditional on the merger of Bryant and Beazer not proceeding. Taylor Woodrow is understood to be considering upping the cash component of its offer to 100p per share, valuing Bryant at around £550m. Bryant has now adjourned until 26 January the EGM to seek shareholder approval for its offer for Beazer, which was announced in December. Bryant received the backing of 77% of Beazer shareholders for its offer last week. If the merger goes ahead it will create a new company to be known as Domus. Merrill Lynch analyst Kevin Cammack felt the deal had a good chance of being approved. “They’ve got the proxies to declare it – the question is how much they’ll come under pressure from the institutions.” Top Housebuilders Mergers could soon change the order Group Market cap (£m) Berkeley 979 Barratt 721 Taylor Woodrow 655 Wimpey 609 Persimmon 505 Bryant 489 Beazer 480 Source: Financial Times