Wimpey takes over again as UK's biggest housebuilder with £300m Laing deal
Thursday 17 October 2002
George Wimpey recaptured its crown as Britain's biggest housebuilder yesterday after it snapped up John Laing's homes division in a deal worth about £300m.
The long-awaited sale of Laing Homes brings the former construction conglomerate to within a whisker of becoming a pure player in the private finance initiative (PFI) market.
Bill Forrester, Laing's executive chairman, said the deal provided the group with "financial muscle" to double in size over the next two years. He added that he was eyeing one or two acquisition targets.
Wimpey, primarily a mass-market housebuilder, is paying Laing £297m, including a £30m slice of intracompany debt. The amount, which is a small discount to the division's net asset value, will be paid in four cash instalments.
Peter Johnson, the chief executive of Wimpey, said the deal fitted with the group's strategy of developing a premium brand to increase the revenue it received from each plot of land. "We wanted an Audi alongside our Volkswagen," he said. Laing Homes has a strong presence in the South-East and the Midlands and the average selling price of one of its homes is £280,000, nearly twice that of an average Wimpey home.
The market broadly welcomed Wimpey's move, sending its shares 7.5p higher to 290p. Shares in John Laing slipped 2p to 143.5p.
Mr Johnson said the deal, which does not include Laing's US housebuilding arm, its luxury UK housing activities or its social housing operations, would enhance earnings immediately. Paying in four chunks would allow the group, which has one of the industry's shorter land banks, to press on with land purchases, he said.
The sale is the latest in a flurry of mergers and acquisitions in the sector. Last year, Persimmon bought Beazer Homes, Wimpey acquired McAlpine Homes and Taylor Woodrow bought Bryant Group.
Mr Johnson said consolidation remained "inevitable" in a still fragmented industry. Even with Laing Homes, Wimpey still has less than 10 per cent of the market.
Asked if the City apathy to the PFI sector had led Laing to question its decision to focus on infrastructure development, Mr Forrester said: "No. We are replacing a cyclical business with a predictable earnings business."
- 1 Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Alex Salmond: 'The rocks would melt with the sun before I'd ever set foot in the House of Lords'
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Ice Bucket Challenge: US firefighter Tony Grider dies after participating in charity craze near power lines
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...