Centex Corporation, the American volume housebuilder, has put its British business Fairclough Homes up for sale for about £250m
Centex was the first American housebuilder to move into the UK market when it bought Fairclough six years ago. City analysts believe Centex wants to off-load Fairclough, its only presence in the UK, because it has failed to win a large enough market share.
In a statement on Monday, Centex said that it was “exploring strategic alternatives” for Fairclough, including a possible sale. It has appointed Merrill Lynch to advise on the disposal.
A management buyout of the business is also a possibility.
The future of Stewart Baseley, chairman and chief executive of Centex UK, and chairman of the Home Builders Federation, is uncertain.
Fairclough, whose headquarters is in Guildford, Surrey, operates in the South-east, the Midlands, the North-west and Yorkshire. In 2004 it completed 1563 units and reported £36.3m of operating earnings on sales of £275m.
Paul Pedley, chief executive of Redrow, this week said that he was interested in the news that Fairclough was up for sale. “We have a totally open mind on it,” he said. “I’m sure every major housebuilder will be looking at it. The question is always, does it add value for our shareholders?”
Analysts at ABN Amro said when Centex first bought Fairclough, “it was part of a European push and intended to extend the business beyond simply selling the new home into home security.”
Corporate activity in the housing sector generally has been on the increase in recent months. Two weeks ago, Building revealed that Lend Lease was in talks to buy Crosby Homes from the Berkeley Group for about £270m.
Last week Lend Lease and Berkeley confirmed that they were holding talks, and as Building went to press this week, a further announcement confirming the deal was expected to coincide with Berkeley’s annual results announcement today.
It is thought that Nigel Hugill and Robin Butler, former directors of developer Chelsfield, will take on the roles of Crosby chairman and director respectively.
Crosby’s directors are expected to move across to Lend Lease if the deal is completed.
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