Building understands a deal could be announced as early as mid-May

Planning Houses

Galliford Try is sizing up a potential acquisition of Shepherd Group’s housebuilding division, Building understands.

A market source confirmed the two firms were exploring the possibility of a potential deal, which could be announced as early as mid-May.

Shepherd Group embarked on a review of its businesses - which included housebuilder Shepherd Homes, construction and engineer divisions and modular builder Portakabin - in December, to improve profitability and address “very disappointing” performance in its construction and engineering division.

Earlier this year Building reported that Shepherd Group held preliminary talks with Wates about a potential acquisition of Shepherd’s construction and engineering divisions, but an offer has so far failed to materialise.

Earlier this month, Mark Perkins, Shepherd Group chief executive, said the group’s ongoing review could result in redundancies at Shepherd Construction, in order to “establish the right scale and platform for future growth and sustainability”, but added the division “will do everything possible to minimise potential redundancies”.

A Galliford Try spokesperson said: “We don’t comment on speculation”. A Shepherd Group spokesperson said: “We do not comment on speculation and rumour.”