Taylor Wimpey drops out of Cala Homes auction

Cala Homes
Cala has been put up for sale by Legal & General (pic: Terry Murden)

Taylor Wimpey is no longer pursuing Cala Homes after its owner Legal & General knocked back an initial bid for the housebuilder, according to sources.

L&G put Cala on the market with a sale tag of at least £1 billion and it is understood that Taylor Wimpey’s opening gambit was too low.

Fellow FTSE 100 developer Persimmon remains in the running but is also being encourged to raise its offer.

One source told The Times that private equity firms look the most likely buyers because they can avoid offering shares and make a straight cash offer.

They include Patron Capital, which sold a majority stake in Cala to L&G in 2018. However, Bridgepoint, TDR Capital and Terra Firma are said to have cooled on the idea of a bid.

Sentiment towards housebuilders rose after Labour’s victory on Thursday as the new government has set ambitious new targets and has promised reforms to the planning process.

Earlier this year Barratt Developments acquired Redrow in what was expected to be a round of consolidation in the sector. Crest Nicholson has knocked back two offers from Bellway and Avant Homes is said to be interested in the firm, and was said to have considered bidding for Cala.

Cala Homes traces its roots back to Aberdeen in 1875 and has at times flirted with the possibility of a flotation.

It builds ‘premium’ homes across the UK, though its focus is in urban areas in Scotland.

Cala and Taylor Wimpey are building hundreds of homes at the West Craigs site in Edinburgh.

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