Directors at Wilson Connolly (Wilcon) have agreed a £480m takeover bid by rival Taylor Woodrow (Taywood) in a deal aimed at consolidating the latter’s position in the top tier of UK housebuilders.
But question marks remain about Taywood’s intentions with Wilcon’s Prestoplan Purpose Built Ltd timber frame business, as it does not figure in the £480m valuation.
Prestoplan has been reducing its output but is expected to record operating profits of £1m this year. Wilcon has previously hinted that it may seek to eventually sell the operation.
The takeover proposal was formally announced in a joint statement also containing both companies’ interim financial results, which reveal a 58% increase in pre-tax profits for Wilcon to £30.2m.
If approved by shareholders, the merger will create a £3bn turnover business but about 300 jobs will be lost from across both companies.
Wilcon managing director Graeme McCallum, who masterminded the company’s re-organisation following disastrous financial results in 2001, is to join the board of Taywood in the deal.
Wilcon chairman Allan Leighton said the firm’s progress in the past 18 months had been recognised by Taywood.
He said: “The business can also look forward to an exciting future as part of a larger group well positioned to exploit the opportunities that lie ahead in the UK housebuilding industry.”
Taywood chairman Norman Askew said: “The acquisition allows us to achieve improved geographic coverage and, due to the excellent fit of the two businesses, be well balanced between our operating regions.”
The acquisition and subsequent integration would result in £25m annual pre-tax cost savings.
