Newspaper article The Journal (Newcastle, England)

Barratt on Course for Top of Big League

Newspaper article The Journal (Newcastle, England)

Barratt on Course for Top of Big League

Article excerpt

Byline: By Graeme King

The North-East can once again boast the UK's largest housebuilder after Barratt Developments yesterday secured rival Wilson Bowden for pounds 2.2bn.

Newcastle-based Barratt is likely to overtake York-based Persimmon as the nation's biggest housebuilder and enter the FTSE 100 listing of the nation's most valuable companies.

When the stock market closed last night, the two companies' combined value was over pounds 5bn ( well ahead of the pounds 4.3bn they were valued at before the deal was announced. Meanwhile Persimmon's value, or market cap, stood at pounds 4.28bn.

Barratt will pay 2,257 pence in cash and stock for each Wilson share, which is 23% higher than Wilson's closed on November 24, the last day of trading before the company put itself up for sale.

The deal for Wilson Bowden is the largest ever seen in the housebuilding sector. It is all the more remarkable as Barratt chief executive Mark Clare only joined the business four months ago. Barratt said the tie-up gave it a better balanced regional profile, as well as a stronger landbank with more than five years' supply of plots to develop.

The company also said its product range now spans the width of the housebuilding market in the UK, from social housing with Barratt and Wilson to the upmarket housing offered under the premium David Wilson Homes brand. Barratt is also buying expertise in commercial development under the Wilson Bowden umbrella, which will help the business to build mixed use developments.

Cost savings through operational and purchasing efficiency are predicted to be worth at least pounds 45m in the second full financial year after the completion of the deal.

Bankers HBOS and Scottish entrepreneur Tom Hunter were also said to be in the bidding for Wilson Bowden before pulling out of the process.

Mr Clare said he was confident Barratt had done enough to secure Wilson Bowden, since the Leicestershire company has already solicited interest in a deal.

He said: "They have been through a full auction process, so you would imagine that if someone was going to pop out of the woodwork, it would have happened by now. …

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