Redrow abandons Bovis takeover interest after offer rejected

(c) Sky News 2017: <a href="">Redrow abandons Bovis takeover interest after offer rejected</a>

Redrow (LSE: RDW.L - news) has formally abandoned its planned takeover of struggling rival Bovis Homes (Frankfurt: 911164 - news) , saying it was not in the best interests of shareholders to raise its offer.

The housebuilder made the announcement following "further analysis" after its initial approach was rejected earlier this month and Bovis terminated discussions.

Its proposal, worth a total of 814 pence per Bovis share, was made up of cash, new Redrow shares and a dividend payment.

But it was later trumped by an all-share merger offer from another rival, Galliford Try (Stuttgart: 0GF.SG - news) , which valued Bovis at 886p-per share.

The statement said: "The Board of Redrow has determined that it is not in its shareholders' best interests to increase its proposal to Bovis above the level which was rejected by the board of Bovis.

"Given this, Redrow confirms that it does not intend to make an offer for Bovis."

Shares (Berlin: DI6.BE - news) in FTSE 250 listed Redrow closed 3.2% higher. Bovis fell 2.1%.

While Bovis also rejected Galliford Try's opening salvo, the pair have continued talks.

A tie-up between Galliford and Bovis would see the country's 6th and 8th-biggest housebuilders by home completions combine at a time when Bovis is attempting to overcome a series of challenges.

Its chief executive David Ritchie left the business after the company issued a profit warning in December linked to poor customer satisfaction.

Bovis announced last month that it would be slowing the pace of building in 2017 after taking a £7m hit related to complaints about unfinished properties, including electrical and plumbing faults.