The confirmed all-share merger with Galliford Try, also listed on the FTSE 250, would create a £2.5bn company.
However, Redrow is clearly still holding out hope for a deal. In a statement it said:
“Redrow continues to believe the potential combination offers a compelling opportunity to create a combined business with the scale and operational strength to compete more effectively in the growing UK housebuilding market.”
Shares in Bovis Homes surged by more than nine per cent as markets opened.
Bovis’s board rejected initial offers from both rivals, but talks with Galliford Try are “ongoing”.
It said in a statement it “concluded that neither reflected the underlying value of the Bovis business and therefore both should be rejected.” However, Galliford Try’s offer of shares only proved more attractive than Redrow’s bid of cash and shares.
Galliford Try’s board said in a statement the deal would “create a new major housebuilder with national scale and geographic coverage” as well as taking advantage of “synergies” in operations, possibly resulting in job cuts. The company did not comment on what those synergies would include.
Galliford Try shareholders would retain 52.25 per cent of the new company, it said. The deal would value Bovis at £1.191bn at a seven per cent premium to Friday’s closing share price.
Redrow said in a statement Bovis rejected its offer on 6 March, saying it “did not merit further discussion.”
Bovis has been a ripe target for takeover since losing roughly 20 per cent of its value since the EU referendum, despite a recovery in the immediate aftermath.
In January the builder's chief executive, David Ritchie stepped down, leaving it under the stewardship of Earl Bailey as interim boss.