Persimmon eyes up possible £1bn Cala bid - report

28th May 2024 08:30

(Sharecast News) - Persimmon saw its share price dip on Tuesday, after it was flagged as a potential buyer of rival housebuilder Cala.

Parent Legal & General Group is understood to be looking to auction off Cala, with a bid deadline expected this week.

The business, which specialises in building new homes across the south of England, the Midlands and in Scotland, is likely to fetch a price tag of around £1bn. It generated gross profits of £258m in 2022 on revenues of £1.32bn.

According to Sky News, citing unnamed City sources, Persimmon - which has a market capitalisation of around £4.6bn - is mulling a potential bid. If successful, it would be the blue chip's biggest deal for several years.

However, analysts believe other bidders could also emerge, including potentially Taylor Wimpey and privately-owned Avant Homes.

Neither L&G nor Persimmon have commented on the report.

As at 0915 BST, shares in Persimmon were off 2% at 1,449.25p, while L&G shares were up 1% at 250.9p.

Life insurer L&G, which took full control of Cala in 2018, is understood to have appointed Rothschild to oversee the auction.