Miller Homes, one of the housebuilders taken over by its lenders during the financial crisis, is closing in on a sale valuing it at more than £600m.
Sky News has learnt that Bridgepoint, the private equity group which owns sandwich chain Pret A Manger, is in advanced talks to buy Miller.
The talks come amid growing investor appetite for well-run housebuilders, which stand to gain from concerted Government efforts to accelerate the supply of new homes across the country.
A deal between Bridgepoint and Miller’s shareholders could emerge during the summer, and potentially as soon as this month, although insiders said there remained a number of key issues to resolve.
It is also possible that another buyer could emerge for Miller, which is focused on building houses in regions outside London.
One source said that if a deal was struck with Bridgepoint, Miller’s price tag would be significantly lower than the £800m previously reported by Sky News.
Bridgepoint, which is expected to float Pret in New York in the next couple of years, has shown a keen interest in the UK housebuilding sector since an offer for McCarthy & Stone was rebuffed in 2015.
Miller, part of Miller Group, is controlled by GSO, a division of Blackstone, the New York-based investment giant.
Lloyds Banking Group, retains a small minority stake in Miller, while Coller Capital, another investment firm, owns just over 20%.
The decision to embark on a new sale process came soon after Chris Endsor, Miller’s chief executive, declared that 2016 had been “an outstanding year” for the company.
Revenue was up 13% on 2015 at £565m, with operating profit 31% higher at £103m.
Miller said the vote in favour of the UK leaving the European Union had had “no discernible impact on the business”.
“The key factors to a sustainable housing market – low interest rates, improved and discipline mortgage lending, high employment – remain in place with consumer confidence levels increasing following the immediate reaction to the EU referendum decision,” the company said.
“In addition to this, the housing industry continues to benefit from ongoing demand and supply-side Government support, in the form of Help to Buy and a gradually improving planning system which has seen planning approvals at their highest level since 2008.”
Rothschild is advising Miller on the talks, while Bridgepoint is being advised by Moelis.
None of those involved would comment on the talks.
Source: Sky