Redrow stops pursuing Bovis Homes

 
Helen Cahill
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A major Bovis investor said Redrow would be a good match (Source: Getty)

Redrow said this morning that it does not intend to make a merger offer for Bovis Homes.

Earlier this month it emerged that Bovis had rejected a takeover bid from Redrow, and was instead pursuing £2.5bn merger talks with Galliford Try.

However, one of Bovis' top 10 investors urged the firm to team-up with Redrow. Royal London Asset Management, which owns 3.5 per cent of Bovis, said Redrow was a better option because "it's a pure housebuilder".

But this morning Redrow said in a statement that it was not in its shareholders' interests to increase its offer.

Read more: Top 10 investor urges Bovis Homes to move in with Redrow, not Galliford Try

"Redrow will instead continue to focus on its highly successful organic growth strategy that has delivered approximately 55 per cent compound annual growth in pre–tax profits from financial years 2012 to 2016," Redrow said.

"Redrow’s strong land bank and disciplined approach to its operations means it is well-placed to both continue to grow its profits and progressively increase dividend payout rates to 33 per cent in the medium term."

On the announcement, Redrow's share price rose 1.2 per cent. Bovis' share price was flat.

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