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The housebuilding industry was today braced for a wave of takeovers after entrepreneur Hugh Osmond confirmed he is in talks with Crest Nicholson.
Shares in the sector rose by as much as 5% with Barratt Developments up 7.2p to 139.1p, Taylor Wimpey 1.87p higher at 45.86p, Bovis Homes rising 17.3p to 457.5p and Bellway 24p stronger at 824.5p.
Investors were also encouraged by a bullish update from Redrow which predicted a return to profit for the first time since 2007 as the recovery in the housing market gathers pace.
The firm, which made first-half losses of £8.7 million in the six months to December 31, said a surge in sales will see it move out of the red in the second half of the financial year. Redrow's shares rose by 2.4p to 153.5p.
Osmond, who built up Pizza Express and Punch Taverns, confirmed his interest in a takeover of debt-laden Crest.
The approach, which is thought to value Crest at £350 million, could result in the first acquisition in the industry since the start of the recession.
“Horizon (Acquisition) is in preliminary discussions with several different companies, including Crest Nicholson, with a view to potentially executing a transaction with one of them,” the firm said today, following media speculation over the weekend.
“At this point, no view can be expressed as to whether a transaction will result from any of these discussions."
Rachael Waring, an analyst at Panmure Gordon, said: “With things looking good at Redrow, there is a bit more positive news for the sector and there are housebuilders out there with the firepower to do acquisitions.”
The Sunday Times said Horizon put the takeover plan to a meeting of Crest's 40 owner banks last Wednesday.
Crest Nicholson would not say if it had received an offer from Horizon, although chief executive Stephen Stone said in an emailed statement: “Reviewing the long term future and prosperity of the company remains a perpetual process, and any decisions we make in terms of strategic direction will be carefully considered to ensure shareholder return and the ongoing stability of the business.”
