Bovis would have paid £950 million for the division, funded entirely by Bovis shares. It would also have taken on £100 million of its debt. Galliford has a pipeline of thousands of homes it can build, many in London.
Government contractor Galliford would have remained an independent UK-listed company focused on construction.
That would allow it to concentrate on helping the business bounce back from a difficult 18 months in the outsourcing industry that has seen numerous contractors either collapse, issue profit alerts or announce strategic reviews.
Galliford, which has been plagued by delays and overrunning budgets, last month said pre-tax profits in the year to June could be up to £40 million lower than the expected £156 million.
Today it said that the board “remains confident in the long-term prospects of the group”.
Despite today’s share price leap, Canaccord Genuity analyst Aynsley Lammin cautioned that interest for the Linden division could be slim because “housebuilders already have good land banks, there are opportunities to buy more land at attractive prices rather than a standalone company”.
