Late Miller bid triggers battle for builder Cala

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The Independent Online
MILLER, the private Scottish construction and housebuilding company, triggered a bid battle for Cala, the Edinburgh-based quoted housebuilder, by putting in a last-minute cash bid of 175p a share.

The offer topped the 165p-a-share cash bid on 15 March by Dottrell, the buyout vehicle for Cala's management team led by chairman Alan Downie and backed by Bank of Scotland. Mr Downie said yesterday the management team would come back shortly with a higher offer.

Miller has bought a 1.1 per cent stake in Cala, and secured the approval of the two non-executive directors, Lord Razzall and Donald Sutherland. Miller's offer has the conditional support of institutions holding a further 19.6 per cent of Cala.

Cala built about 600 homes last year, which contributed 80 per cent of group profits of pounds 10.9m in the year to the end of June. It is expected to make pounds 12m and earnings of 17.3p in the current year.

Miller began housebuilding three years ago and housing contributed only 30 per cent of last year's group profit of pounds 14.8m.

Miller Homes built 1,100 units last year after hiring Geoff Potton from Bryant Homes to build up the division.

Acquiring Cala would give Miller a foothold in the housing market in England and the capacity to build 2,000 homes a year, and turn the company into a largely housebuilding operation, chief executive Keith Miller said.

Its other activities include property development, civil engineering, urban regeneration and contract mining in Scotland, Wales and Yorkshire.

Cala - the former City of Aberdeen Land Association - is a listed company and has suffered from neglect by UK institutions.

Two months ago the shares languished at 87.5p, little more than five- times forecast earnings. Yesterday they leaped 31p to 184.5p.