Housebuilder Vistry Group has agreed to take over rival Countryside Properties in a deal worth around £1.25bn.
Vistry, formerly known as Bovis Homes, said the cash and shares offer totals about 249p per share and represents a 9.1% premium to Countryside’s closing price of 228p on Friday.
The deal will bring the Countryside Partnerships brand into Vistry’s existing stable, including Bovis Homes, Linden Homes and Drew Smith.
Rival rival Inclusive Capital Partners (In-Cap), Countryside’s third shareholder with a 9.2% stake, said it was withdrawing from the bidding process and backing the Vistry tie-up.
Countryside was put up for sale in June after rejecting two unsolicited takeover approaches from In-Cap.
But Vistry’s deal price is lower than the second proposal of 295p submitted by In-Cap in May, which valued Countryside at a total of £1.5bn.
Countryside chairman Douglas Hurt said: “The Countryside board has carefully reviewed this combination and believes it offers the best potential to create the greatest value for Countryside shareholders.”
In-Cap said he “fully embraces the Countryside by Vistry offering”.
Jeffrey Ubben, founder and managing partner of In-Cap, said: “Due to significant operational synergies, In-Cap believes the combination offers superior long-term value relative to its potential cash offer of 295 p per action”.
Vistry chief executive Greg Fitzgerald, who will lead the merged group, said the combination of the two companies “will create a leader in the association housing sector, with the scale and expertise to accelerate the profitable growth in both associations and homebuilding, and expand delivery.” of much-needed affordable housing in England”.
He added: “We believe there is clear potential to generate material value for both Vistry and Countryside shareholders and wider stakeholders in a combined group with enhanced scale and
superior returns and to improve the performance of key parts of Countryside’s business.”
The group said it has earmarked at least £50m in cost savings by the end of the second year after the deal, while pointing to “significant benefits” from adding Countryside’s timber framing business.