Guy Hands tries late entry to housebuilder party - Reuters

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Construction diggers are seen at a site being demolished to make room for new apartment buildings in central London November 21, 2011.

LONDON, July 14 (Reuters Breakingviews) - Buyout baron Guy Hands is the latest dealmaker to try to crash the UK housebuilder party. His Terra Firma Capital Partners is considering a 700 million pound bid for Doncaster-based Keepmoat Homes, according to Sky News. The company, currently owned by rival private equity group TDR Capital and Hugh Osmond’s Sun Capital Partners, is also considering a potential initial public offering.

The UK housebuilders have been a fertile hunting ground for buyout firms, with McCarthy & Stone, St. Modwen Properties (SMP.L) and Kier Living all succumbing to buyouts. Share prices have been hammered by higher raw material costs and fears the sector will be slapped with a tax to pay for the removal of cladding following a fire in London in 2017. Listed peers Persimmon (PSN.L), Taylor Wimpey (TW.L) and Barratt Developments (BDEV.L) are still trading on average 16% below their pre-Covid levels. Yet on Wednesday, Barratt Chief Executive David Thomas raised profit expectations for the year ahead. And investors in St. Modwen recently forced bidder Blackstone (BX.N) to pay up. The easy money in UK housebuilding has probably already been made. (By Aimee Donnellan)

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Editing by Neil Unmack and Karen Kwok

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

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