Housebuilders: a buyers’ guide | News

Company name	Financials	Sale status	Potential pitfalls	Potential buyers
Linden Homes. Philip Davies, chief executive	2005 pre-tax profit was £12.8m on a turnover of £280m	Linden Homes officially put up the “for sale” sign in September, after asking NM Rothschild to conduct a review of the business. The sale process is expected to be completed by the end of November.	The private equity arm of HBOS owns 35% of the business. The bank may have loaded the housebuilder with debt in order to pay dividends. The potential debt burden will have to be factored into any bid.	Scotland’s Miller Group has been looking at Linden, as has Bellway Homes. Other names linked to Linden are Blackstone and Permira, as well as housebuilders Persimmon, Berkeley and Stewart Milne.
Wilson Bowden. Ian Robertson, chief executive	2005 pre-tax profit was £223.7m on a turnover of £1.2bn	The Wilson family’s decision to review their stake in the business sparked rumours it was up for sale. No decision has been announced, but most commentators expect to see the stake put on the market.	2005 was a challenging year for this particular housebuilder, with profit dropping 14%. However, that is unlikely to deter rivals from snapping up the business.	Early rumours surrounded HBOS, but bigger rivals in the sector, such as Barratt and Persimmon, would be front runners to get hold of Wilson Bowden. Whether chairman David Wilson will want to sell to them is another matter.
Taylor Woodrow. Ian Napier, chief executive	2005 pre-tax profit was £411m on a turnover of £1.6bn	Nothing official, but on 12 October shares in the housebuilder rose 11.75p. Last week, Barclays acquired more than 34 million Taylor Woodrow shares, equivalent to 5.98% of the company.	Exposure to the US market is a worry for potential investors. It has been in decline for months and observers think it could get worse before it gets better. The US accounts for about 50% of profit.	Persimmon and Barratt are the only two housebuilders that could seriously entertain a takeover, but a merger with George Wimpey would be complementary because of the US business.
George Wimpey Peter Redfern, chief executive	2005 pre-tax profit was £366.5m on a turnover of £3bn	Following disappointing financial results in recent years, Wimpey has long been seen as vulnerable to a takeover.	Like Taylor Woodrow (see above), a large chunk of Wimpey’s business comes from the US.	Speculation in late 2005 that a takeover would be a sound move by Persimmon has died down in recent months, linked to the proximity of the end of John White’s stewardship of the company. However, with Mike Farley recently installed as Persimmon’s chief executive, this position may change at any time.
Crest Nicholson Stephen Stone, chief executive	2004/05 pre-tax profit was £81.3m on a turnover of £714.3m	In July Crest was seen as vulnerable to a bid, following speculation that tycoon Gerald Ronson was going to offload his 23.3% stake in the business. However, Ronson has held on to his equity for now.	Crest saw a slight dip in pre-tax profit last year, but investors remain upbeat about the company as the share price has climbed 42% to 556.5p per share over the past 12 months.	Bovis Homes is continously linked with Crest, but should it come on to the market, it is thought most of the major housebuilders would be keen to get their hands on their business.