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LONDON, March 28 (Reuters) - British housebuilder Redrow said on Tuesday it did not intend to make an offer for rival Bovis just over two weeks after its approach was rejected as too low, leaving one potential bidder for the ailing firm.
Bovis, whose CEO quit in January following a profit warning resulting from a failure to build enough homes on time, has been the subject of takeover speculation since a major shareholder wrote to another builder in January suggesting a tie-up.
Earlier this month, Bovis rejected bids from both Redrow and Galliford Try but said it remained in talks with the latter, and also saw a viable future as a stand-alone firm.
On Tuesday, Redrow said it would not increase its bid for Bovis, withdrawing from the process.
“The Board of Redrow has determined that it is not in its shareholders’ best interests to increase its proposal to Bovis above the level which was rejected by the Board of Bovis,” the firm said in a statement.
A tie-up between Bovis and Galliford Try would create Britain’s fifth largest housebuilder by volume, although the firms would likely seek to cut costs in what would be the first major consolidation in the sector for nearly a decade.
Galliford’s proposal valued the entire issued equity of Bovis at 1.19 billion pounds ($1.45 billion), or 886 pence per share.
It also envisaged an equity split in the combined group of 52.25 percent for Galliford shareholders and 47.75 percent for Bovis shareholders. (Reporting by Costas Pitas; Editing by Kate Holton and Mark Potter)