UK housebuilder Linden Homes has appointed NM Rothschild to carry out a strategic review of the company to “consider all options”, including a sale of the business.

The company has been working with Rothschild on a review of its operations and a report is expected at the end of September.

Philip Davies, Linden’s chief executive, said the board was “considering all options”, and that it was “premature” to say what conclusions would be given in the report. “We could sell or we could do nothing; we’ll decide in due course,” he said.

One City source said a trade sale was the most likely outcome, because the Bank of Scotland had not been paid a dividend since it took a 35% stake in the company in 2001, and as a result would be looking to exit. The bank acquired its shares after it backed a £73m management buyout.

In an interview with Building last September, the chief executive said he preferred running Linden away from scrutiny of the City. “It’s more comforting in the private arena,” he said, adding: “When you are building apartments, profits are lumpy so you can’t always satisfy the City with steady growth. We don’t have to meet shareholders’ expectations in the public arena.”

One City source said a trade sale was likely because the Bank of Scotland had not been paid a dividend since it took a 35% stake in 2001

However, the review is likely to prompt interest from quoted housebuilders including Redrow and Bellway as well as private company the Miller Group.

Currently, Linden staff hold a 48% stake in the business, Davies owns 17% and the Bank of Scotland owns the remainder.

In June, Linden reported a 178% increase in pre-tax profit to £12.8m, up from £4.7m in the 2004/05 financial year, following the sale of its north-west division. Group turnover was £280m, up 33% on the previous year.

However it has not always been plain sailing for the firm. Last year Davies wanted Linden to build 1500-1700 units but actually completed just over 1000 units. The plan for 2006 is to build between 1300 and 1600 units. Turnover is expected to reach £300m.