Construction and housing firm is understood to be prepared to pay about £200m for Linden Homes
A short statement to the Stock Exchange said: “In response to recent press speculation, the boards of Galliford Try and Linden announce that they are in exclusive discussions with one another which may or may not lead to Galliford Try making an offer to acquire the entire issued share capital of Linden. Any further announcements will be made as appropriate.”
The potential deal is thought to be worth around £200m and would be Galliford Try’s largest ever acquisition.
Linden appointed investment bank NM Rothschild in August to advise on a possible sale. In June it reported a £12.8m pre-tax profit on a £280m turnover.
The ownership of the firm is split between Philip Davies, the founder and chief executive, Andrew Sells, the chairman, and HBOS, which owns 32%. HBOS backed a management buyout for £72.9m in 2000.