Newspaper article The Evening Standard (London, England)

Housebuilders on Move after Persimmon Pounces

Newspaper article The Evening Standard (London, England)

Housebuilders on Move after Persimmon Pounces

Article excerpt


THE big building companies were back in vogue today with City speculators bracing themselves for another round of consolidation.

It follows confirmation that Persimmon is the mystery bidder for rival Westbury, a move announced late on Friday. Persimmon is expected to offer 560p a share in cash for Westbury which jumped 613/4p to 5553/4p, at which it is valued at [pounds sterling]636 million.

Curiously enough, the buyers were also in for Persimmon, which surged 81p to 1031p as broker Panmure Gordon raised its rating from hold to buy and lifted its 12-month target from 800p to 1070p. It says the deal will be earnings positive by 16% in 2006.

Another broker, Credit Suisse First Boston, repeated its outperform rating and points out that Persimmon has already doubled in size through acquisition and that its management appears comfortable enough with the underlying state of the housebuilding market to go ahead with the deal.

At these levels, Persimmon weighs in at more than [pounds sterling]3 billion.

Broker Bridgewell Securities reckons Taylor Woodrow, unmoved on 3293/4p, or George Wimpey, up 133/4p at 4481/2p, might have made better targets for Persimmon, but everyone is already speculating who the next target might be.

Bridgewell thinks it could be Bellway, 50p higher at 10001/2p, or Wilson Bowden, 19p better at 1217p, while Panmure Gordon says it could be Crest Nicholson, 2p dearer 406p.

US broker Morgan Stanley was responsible for placing 7.5 million shares in Taylor Woodrow at around 334p.

This latest round of takeover news pleased investors generally and enabled the FTSE 100 index to post a rise of 11.8 at 5476.9 in thin trading.

But broker Investec Securities believes it could be all downhill for the rest of the year: "UK equities will struggle to make further progress despite the prospect of a strong performance by US markets in the final weeks of 2005."

The UK market is underpinned at current levels but could experience churn with investors moving back into blue-chips and international companies.

Spread bookie IG Index says its punters are undecided about the market's run-up to Christmas and have been straddling their positions. …

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