Housebuilder expects to make £195m from the sale of the business it bought last April
Housebuilder Barratt has put the commercial development arm of Wilson Bowden up for sale, according to city sources.
The possible sale follows a strategic review of the business conducted last year by Barratt who bought the whole of Wilson Bowden for £2.2bn last April.
According to analyst UBS, Barratt would expect to make at the very least £195m from the sale of the business, which it predicts will have sales of around £100m this year.
Building understands that Barratt is now open to offers for the business, for which it has received a number of unsolicited proposals last year.
The news follows a declaration by Barratt chief executive Mark Clare, in his presentation of interim results in February, that Wilson Bowden Developments was not a core part of the group.
Clare said: “Whilst there are crossovers between Wilson Bowden Developments and our core house building business, they are limited.
“Given the challenges with the current market, we intend to continue to run this business as a standalone segment and deliver shareholder value by exploiting its current portfolio.”
The news follows the continued downturn in the housebuilding sector, and widespread speculation that Barratt paid too much for the purchase of Wilson Bowden last summer.
This has left Barratt with debt of £1.7bn, according to UBS, £700m of which needs to be refinanced before April next year.
According to the magazine Property Week, agency Jones Lang LaSalle is assisting Barratt in the sale of the business.
Both Barratt and JLL declined to comment on the story, although the firm admitted Barratt was one of its clients.