Miller chairman Keith Miller said that the acquisition was part of the group’s plan to become a national player. The group builds homes primarily in Scotland but also in the North-west, the Midlands and the North-east.
Miller builds about 200 homes a year in the North-east, compared with Cussins’ 500 in the region.
Keith Miller said of the North-east market: “All the main housebuilders are there and the market is even. We don’t want to be in the South-east where it is big peaks and troughs.”
He said he also wanted to expand the group’s North-west and Midlands operations and that the company had £100m to spend and could borrow another £250m.
Cussins chairman Peter Cussins said of the deal: “Continuing investor apathy towards small capitalisation stocks has restricted both the share price of Cussins and the ability of Cussins’ management to grow the business.”
One banker active in the sector said the deal was one of many in the offing as smaller construction businesses failed to make an impact on the stock exchange. He said that he had talked to half-a-dozen interested parties in the past couple of months, although no clear proposals had emerged.
The price that Miller paid for Cussins represents a premium of 40.4% above the closing price of Cussins’ shares on 12 July 1999, the day before Cussins revealed it was in takeover discussions.
In 1998, Cussins recorded pre-tax profit of £2.5m on a turnover of £35.2m.
In the same year, Miller recorded pre-tax profit of £2.4m on turnover of £73.7m. It completed 1064 homes. The agreed bid for Cussins was Miller’s first successful venture into the stock market. It had previously tried to buy publicly quote City Site Estate in December last year. More recently, it attempted to take over Cala, the Edinburgh-based housebuilder that was bought out by its management.