Barratt Developments plans to finalise Redrow takeover this week after appeasing CMA

2024-08-19 https://www.thisismoney.co.uk/money/markets/article-13756585/Barratt-Developments-plans-finalise-Redrow-takeover-week-appeasing-CMA.html HaiPress

Barratt Developments is set to complete its acquisition of Redrow later this week,six months after initially announcing the takeover.

The £2.5billion deal would create Britain's largest housebuilder,with the ability to construct about 23,000 homes per year and earn over £7billion in revenues.

Once the buyout is finalised,Redrow shareholders would control almost a third of the business,which will be renamed Barratt Redrow,with Barratt investors holding the remaining two-thirds.

Takeover: Barratt Developments is set to complete its acquisition of Redrow later this week

Redrow's current chief executive,Matthew Pratt,will become CEO of the combined group,while its finance boss,Barbara Richmond,will be both chief financial officer and group integration and synergies director.

Russ Mould,investment director at AJ Bell,said: 'Barratt will hope its timing is good as the industry looks to pick itself off the floor following a difficult few years marred by a weak property market and rising interest rates.'

Barratt finished building 14,004 homes in the year ending June 2024,which was at the top end of guidance but significantly below the 17,206 properties completed in the previous 12 months.

The average selling price of its homes was also £307,000,down from over £319,000 the prior year.

Yet Britain's housebuilders are becoming more optimistic of a short-term recovery in fortunes partly due to falling mortgage costs and the Labour Government's plans to overhaul planning laws.

When the BoE cut the UK base rate by 0.25 percentage points to 5 per cent in early August,many lenders,including NatWest,Virgin Money,and Halifax,responded by reducing their mortgage rates.

Barratt Developments shares were 1 per cent up at 541p on Monday morning,while Redrow shares were 2.4 per cent higher at 778.5p.

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Barratt Developments plans to finalise Redrow takeover this week after appeasing CMA