Bidders to battle for Wilson Bowden

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The Independent Online

Wilson Bowden, one of Britain's biggest housebuilders, has received takeover approaches that could value the company at around £2bn, it emerged yesterday.

The approaches follow the announcement in the summer that the founder and chairman, David Wilson, was reviewing his 33 per cent shareholding. Wilson Bowden's larger rival George Wimpey and the smaller operators Redrow and Bellway have all made informal approaches to the Wilson Bowden board, which has appointed HSBC's investment banking arm to run an auction of the business. In response to heightened speculation over the weekend, the company said last night: "The board can confirm that it is in preliminary discussions with a number of parties regarding a possible offer for the company. These discussions are at a very early stage and there can be no certainty they will lead to a formal offer being made for the issued share capital of the company."

Trade buyers for Wilson Bowden are likely to face stiff competition from financial players, including HBOS, the bank that has already bought McCarthy & Stone in the sector and is currently trying to acquire the housebuilder Crest Nicholson.

The housebuilding industry has been through several rounds of consolidation in the past five years. While weaker operators were initially picked off, more recently well-run companies such as McCarthy & Stone and Wilson Bowden have become targets.

Given the size of Mr Wilson's family shareholding, any party that acquired it would be obliged to launch a full takeover bid for the rest of the shares.

In 2005, which was described as a "challenging" year by Wilson Bowden, the company, which is based in the East Midlands, made a pre-tax profit of £216m, on turnover of £1.2bn. It built some 5,000 homes in the year at an average selling of £198,200.

At Friday's closing share price of 1,831p, the company was worth £1.7bn - Mr Wilson listed it in 1987 at 130p, which valued the business at the time at £87m. The company, which includes the David Wilson Homes brand, specialises in mid- and upper-market family houses.

A sale would net some £660m for 65-year-old Mr Wilson and his family, propelling him into the 100 richest people in the country. He is already reckoned to have taken well over £100m out of the business over the years as a result of previous share sales and dividend payments. Three years ago, the Wilson family trimmed its stake from 39 per cent to 33 per cent.

Mr Wilson set up the business with his father in the early 1960s. In 1966 the first large housing site for 36 detached homes at Packington, Leicestershire, was acquired, just a few miles from where the group head office is situated today.

A private individual, he lives with his second wife Laura in Leicestershire and lists his hobbies as country pursuits and visiting rival housebuilders' development sites. His son, James, is Wilson Bowden's development director, having joined the group soon after leaving university.

Mr Wilson senior last month gave a £2m donation towards a new library at the University of Leicester. Announcing the gift, he said: "I am a great believer in creating one's opportunities in life, and I hope that the success of my own organisation is testament to that. However, there is nothing that can substitute a good grounding in life - both through your family and your education."

Mr Wilson's only brush with publicity came through his association with the collapsed insurer Equitable Life, where he was a non-executive director. Along with other directors, he found himself facing legal action over alleged negligence - Mr Wilson was, by far, the richest of the directors targeted. Although the lawsuit was dropped last year, he spent two years fighting it, taking him away from total focus on the Wilson Bowden business.