Galliford Try abandons plans for takeover of rival housebuilder Bovis
Housebuilder Galliford Try has given up its pursuit of under-pressure rival Bovis Homes just a week after fellow suitor Redrow walked away from the takeover tussle.
Galliford had remained in talks with Bovis after its approach was first rejected last month, but said it had abandoned plans for a tie-up after it was unable to "secure the support of the board of Bovis on terms that represent the best interests of Galliford Try shareholders".
The move leaves Bovis without any potential deals on the table, with Redrow last week saying it would not return with a higher offer after its initial proposal was also rebuffed.
But Bovis has put faith in new leadership to help "deliver greater value for shareholders", separately announcing the appointment of former Galliford boss Greg Fitzgerald as its new chief executive.
Mr Fitzgerald spent more than 30 years of his career at Galliford, latterly as chief executive and chairman.
Galliford said talks with Bovis had been "largely constructive", but added its failure to agree on the terms of the all-share merger meant it was "now no longer considering a combination".
Kent-based Bovis said that Galliford had "reaffirmed" the terms of its merger proposal and potential cost savings, but said the approach "failed to reflect the underlying value of the Bovis business".
It added: "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."
Bovis has been under pressure since warning over profits following its failure to build enough homes on time, with its former chief executive David Ritchie stepping down in January after eight years in the role.
The group was rocked by customer complaints over the poor quality of its homes, which were sold unfinished and were plagued by electrical and plumbing faults.
The firm announced in February that annual pre-tax profits were down 3% to £154.7 million, as it set aside £7 million to cover remedial work and compensation for affected customers and revealed a raft of measures to improve the service.
Its share price has also tumbled since Britain voted to leave the European Union, making it vulnerable to a takeover tilt from a competitor.
But in an update on trading alongside its announcement on the Galliford deal rejection, it said sales and reservations are in line with the board's expectations.
It stressed it was "making good progress" with its overhaul announced in February and on resolving the customer complaints from the start of the year.
Mr Fitzgerald will take on the top job at Bovis on April 18 on a £650,000 annual salary.
He said: "Bovis has a great brand, excellent people and a high quality land bank.
"I very much look forward to working with the management team to restore Bovis' position as a leading housebuilder and deliver significantly improved returns to shareholders."
Bovis shares rose 3% as investors shrugged off the end of takeover talks for the group and gave a thumbs up to the appointment of Mr Fitzgerald.
Charlie Campbell, an analyst at Liberum, said Mr Fitzgerald was a "very strong" hire and " very well regarded" in the industry.