Merger talks abandoned
Galliford Try withdraws from pursuit of Bovis
Bovis today unveiled former Galliford Try chairman and chief executive Greg Fitzgerald as its new CEO.
In a statement, Galliford said it was no longer interested in the proposed all-share merger and would focus on its current business model.
Galliford Try announced on 12 March that it had approached the board of Bovis and the leadership teams have held “largely constructive” discussions over a number of weeks.
“It has, however, become clear to the board of Galliford Try that it is not possible to secure the support of the board of Bovis on terms that represent the best interests of Galliford Try shareholders,” it said.
“The board believes that Galliford Try has a strong future based on its current business model. Galliford Try will continue to focus on delivering the five-year organic growth strategy.”
This strategy is targeting sustainable growth and strong returns across each of Galliford Try’s businesses; Housebuilding, Partnerships & Regeneration and Construction. Targets include growth in Group profit before tax to 2021 of at least 60%, a five year compound annual growth rate of dividends of at least 5% and a return on the Group’s net assets in 2021 of at least 25%.
The Board of Bovis noted the announcement and said there had been talks about the potential synergies that might result from a combination of the businesses.
In a statement, Bovis said: “Following these discussions, Galliford re-affirmed the terms of its merger proposal and the level of synergies expected to arise from the combination.
“The board has reviewed the merger proposal and concluded that it failed to reflect the underlying value of the Bovis business.
“Accordingly, the board has decided to reject the proposal as it believes that an independent strategy under the leadership of Greg Fitzgerald will deliver greater value for shareholders.
Mr Fitzgerald spent more 30 years at Galliford Try where he oversaw its transformation and improved profitability.
He is a former non-executive Director of the NHBC and is currently non-executive chairman at Ardent Hire Solutions and Baker Estates.
Bovis said current sales and reservations are in line with the board’s expectations and that it is making good progress with its priorities for 2017.