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