TAYLOR Wimpey, one of Britain’s biggest housebuilders, is understood to be considering spinning off its North American business through a sale or stock market flotation, which could enable it to slash its debt mountain.
The company’s adviser JP Morgan Cazenove is thought to have started sounding out rival and other institutions on their appetite for a sale or float.
However, it is still early days and a disposal of the division is at least several months off.
The North American business has a net asset value of £560m and a demerger could raise enough to allow Taylor Wimpey to pay down all or most of its debt of £750m, which it has already reduced from £1.5bn at the end of 2008.
The group’s chief executive Pete Redfern said on Monday that he had received offers for the business but added there was “no active sale process”.
“As we have previously said, we have an open mind about the strategy for our North American business,” the company said yesterday.
The firm added: “However, no decisions have been taken. The outlook for our North American business is much improved and it is well positioned to benefit from any further improvement in market conditions.”
Cenkos analyst Kevin Cammack said a demerger would be a good move for Taylor Wimpey, and could reap it as much as £800m.
“With the sector in recovery mode in the US and Morrison enjoying a decent reputation in the market, a demerger is certainly an option with the cash proceeds likely to substantially eliminate its net debt of £750m and allow it to re-invest in its UK housing business at least on a level playing field,” he said.