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Wimpey shares lift on buy-out hope

17/11/2008

SPECULATION over possible private equity interest in Taylor Wimpey caused shares in Britain's biggest housebuilder to rise by 10 per cent today.

The ailing business, which last week axed 1,000 jobs amid a further slump in property sales, is saddled with debts of £1.9bn.

Several American private equity firms are said to be eyeing the business and attempting to strike a deal with chief executive Peter Redfern. Oaktree Capital and Apax are reportedly considering a deal, while UK players 3i and Permira are also said to be interested.

Taylor Wimpey was created by the merger of Taylor Woodrow and George Wimpey in July last year, but its shares have plummeted 98 per cent as the credit crunch hit mortgage availability and sent house prices tumbling. It must renegotiate its terms with lenders before early next year to avoid breaking banking covenants.

As part of a restructuring, existing shareholders could be wiped out, with private equity firms taking on the debt, although the plans could depend on the attitude of Taylor Wimpey's lenders, the report added.

Taylor Wimpey racked up £1.54bn in losses for the first six months of the current year.