Disposal could be condition of raising funds from sale of 30% stake to private equity firms
Private equity groups circling Taylor Wimpey are heading for a clash with the housebuilder over a planned break-up of the group, according to sources close to the situation.
It is understood the housebuilder is in talks with four private equity buyers over the sale of a 30% stake. The winner is expected to seek the sale of its Spanish and North American divisions to focus on its UK operation.
One private equity source said: “It’s the obvious route for a company with overseas divisions that are hugely underperforming.”
But the plans face opposition from the Taylor Wimpey board, which would resist a move to dispose of either arm, according to a source close to the company.
The source said: “A global group has better access to capital markets, superior purchasing power and a better understanding of pricing trends.”
Turnover at its North American division in 2007 was £1.2bn, while in Spain it was £64m compared with £4bn in the UK.
The source said any break-up would not happen for at least a year as potential investors, which include US group Texas Pacific, would wait for the market to improve before cashing in.
A relaxation of Taylor Wimpey’s banking covenants, which the company said may be breached in February next year, is contingent on the raising of fresh equity.
The private equity source said more investors would appear in coming weeks and a bid would probably be put down by the beginning of August.
Taylor Wimpey declined to comment.
Mark Clare, chief executive of Barratt, has admitted he wouldn’t have bought Wilson Bowden for £2.2bn last year if he had foreseen the credit crunch.
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