Bovis Homes has rejected a takeover approach from Galliford Try — but has recruited an industry veteran who once worked for its spurned suitor as its new chief executive.
The struggling housebuilder has appointed former Galliford chief executive Greg Fitzgerald, who was at the helm of the housebuilding and construction group for nearly a decade, to run the company.
Mr Fitzgerald spent more than 30 years at Galliford before stepping back as chief executive in 2014 and departing the group following year. He will join Bovis on April 18.
Bovis has had a difficult few months, failing to meet construction targets and paying customers thousands of pounds to move into unfinished homes. The company issued a profit warning late last year, and chief executive David Ritchie resigned in January.
In the weeks since, it has rejected two takeover offers from Galliford and Redrow.
On Wednesday, that Galliford Try said it was abandoning efforts to take over Bovis Homes after failing to reach an agreement with Bovis’s board on the terms of a deal, a week after Redrow also gave up its own takeover attempt.
The company confirmed on Tuesday that it is “no longer considering a combination”, which would have been the first large-scale merger in the UK housebuilding sector since the financial crisis.
Galliford’s first bid for Bovis was rejected last month, but the two companies had held further discussions in an attempt to reach a deal and Galliford said discussions had been “largely constructive”.
But it said on Wednesday it had “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”.
Bovis’s problems have led to takeover speculation for some time, but analysts questioned whether its £1bn land bank was worth the cost of an acquisition given the relative availability of land in the current market.
Bovis said in a statement that the offer from Galliford came in too cheaply and that “an independent strategy under the leadership of Greg Fitzgerald will deliver greater value for shareholders.”
Bovis said that more than half of its employees had undertaken customer training recently as it sough to resolve “the high level of customer service issues we faced at the start of 2017.”
Shares in Bovis rose 2.5 per cent to 867.5 pence in early trading on Wednesday while shares in Galliford rose 1.1 per cent to £14.77.
