Mystery Chinese predator swoops for upmarket housebuilder Cala
A mystery Chinese bidder has approached Cala Group’s shareholders about a potential £600m takeover, Sky News learns
One of Britain's biggest housebuilders has been approached about a takeover by a mystery Chinese predator ahead of a Government push to deliver 1 million new homes by 2020.
Sky News has learnt that privately-owned Cala Group, which describes itself as the UK's most upmarket major homebuilder, is in early-stage talks with the potential buyer.
Cala's shareholders - Legal & General and Patron Capital, a specialist real estate investor - have engaged Lazard, the investment bank, to advise them on the talks, although people close to the situation cautioned that they may not lead to a deal.
The Chinese buyer, which is understood not to be Vanke Group, the country's biggest residential developer, is said to be being advised by KPMG.
Cala, which this month reported strong financial results for the year ended 30 June, could be worth more than £600m in any transaction, according to analysts.
If a deal does take place, it would represent a vote of confidence in the UK housebuilding sector, as well as underlining the opportunity for overseas buyers to acquire British companies more cheaply since the plunge in the value of sterling after June's EU referendum.
L&G and Patron took control of Cala in 2013 in a deal valuing the company at £210m, and it has made a series of acquisitions since then.
They have considered a stock market flotation of the company, and that remains an option depending upon the fate of the takeover discussions, according to insiders.
The approach to Cala has emerged just weeks after Sajid Javid, the Communities and Local Government Secretary, pledged in his speech to the Conservative Party conference that ministers would deliver 1 million new homes by the end of the decade.
He said a £3bn Home Builders Fund would help to deliver 225,000 new houses, with a white paper on housing to be published by the end of the year setting out further steps to address the UK's poor construction record.
Cala's operations are concentrated outside London and the south-east, and focused on areas in the Home Counties, Cotswolds, and around Aberdeen, Edinburgh and Glasgow.
Alan Brown, Cala's chief executive, said the results reflected strong momentum, and he brushed off the impact of the UK's vote to leave the European Union.
"In the 13 weeks since the EU referendum result, and although still early days, the group saw positive trading with total enquiry levels and reservation rates up 9% and 46% respectively while website users have also risen by 32% on the equivalent period last year," he said.
"Sales prices have also remained stable while cancellation rates have actually reduced slightly."
Cala declined to comment on the takeover talks, but said through a spokesman: "Thanks to the quality of our brand and strong financial and trading performance, from time to time we may find ourselves the subject of speculation but from our perspective it is very much business as usual."
L&G and Patron refused to comment.