Beazer cries 'foul' over Trafalgar's Ideal sale

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The Independent Online
DAVID HELLIER

The fight for Ideal Homes looked set to escalate last night. Beazer Homes, one of Britain's biggest housebuilders claims it has been shut out of the bidding by Ideal's owners, Trafalgar House and is considering writing to its shareholders in an attempt to block the deal.

Trafalgar's favoured buyer for Ideal is Persimmon, which has been granted a period of exclusivity by Trafalgar House to put together an offer for the business.

Analysts believe it is prepared to pay around pounds 156m - slightly above the pounds 150m book value of the business. Persimmon may also assume some of the housebuilding subsidiary's debts.

City observers yesterday noted the close relationship between Trafalgar House and Persimmon. Simon Keswick, Trafalgar's chairman, is known to be friendly with Persimmon's chairman Duncan Davidson and his brother, Sir Chips Keswick, is a non-executive director of Persimmon and chairman of Hambros Bank.

Sources close to Beazer Homes said that they could think of no rational business reason why Trafalgar House had not sat down to consider its bid.

They said they would wait to see the final details of the Persimmon offer before deciding what action to take. "It is possible that the offer will be hardened now that our interest is publicly known. In such a case it will be interesting to see what effect this has on Persimmon's shareholders," one source said.

City analysts say Beazer may be prepared to pay between pounds 160 and pounds 170m for the Ideal Homes business, and a Beazer spokeswoman said this figure was "not unrealistic".

Trafalgar House has already said that any offer by Persimmon would be put before shareholders at an extraordinary general meeting. A spokesman said that the agreement with Persimmon offers a "highly satisfactory outcome" for the group.

"A number of approaches for the Ideal Homes business were made and all were considered very carefully. But the Persimmon deal was viewed as the best way forward for Trafalgar House."

Trafalgar needs a sale to reduce its borrowings - but its beleaguered shareholders will be hoping that it gets the highest price possible for a division which contributes a sizeable part of the group's UK profits.

Housebuilding was the most profitable division for Trafalgar and made profits of pounds 28.4m last year, of which the Ideal Homes subsidiary contributed pounds 19m.

A successful purchase for Persimmon would make it one of the country's leading housebuilders but it will need to have a share issue to raise money for the deal.

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