Persimmon mulls £1bn bid for Cala.

Housebuilder Persimmon is reportedly exploring a £1 billion takeover bid for Cala Group, according to recent reports. Edinburgh-headquartered Cala was put up for sale in March by owner Legal and General, who has held ownership of the business for the past six years. Legal and General initially acquired a significant stake in the firm back in 2013, eventually taking full control in 2018.

Amid challenging market conditions, Cala reported a decline in profits during the first half of the year, largely attributed to high interest rates dampening demand for new homes. Sources informed Sky News over the weekend that Persimmon is considering a bid for Cala and is seen as a strong contender. Other interested parties include fellow builders Travis Perkins and Avanti.

Industry analysts anticipate that other major housebuilders such as Taylor Wimpey and Avant Homes may also consider making bids for Cala. If Persimmon’s bid is successful, it would mark one of the largest acquisitions for the York-based company in recent years, further consolidating the housebuilding sector.

This potential acquisition follows a trend of industry consolidation, with Barratt Developments recently announcing a £2.5 billion deal to acquire Redrow in February. This merger is currently under examination by the Competition and Markets Authority.

It’s worth noting that Barratt Developments, Redrow, and Persimmon were named among eight housebuilders by the competition watchdog in February on suspicions of potential breaches of competition law. Concerns were raised regarding the sharing of “commercially sensitive information” among developers, which could impact the pace of new home construction and selling prices.