Fiona Nanna, ForeMedia News

5 minutes read. Updated 4:00PM GMT Sun, 15 September, 2024

In a high-stakes bidding race, the American investor Sixth Street has emerged as the frontrunner to acquire Cala, a prominent UK-based housebuilder, valued between £1.2bn and £1.3bn. The conclusion of this major deal, anticipated this week, could have significant implications for the UK’s housing sector.

Sixth Street, which has teamed up with Patron Capital Partners—Cala’s previous owner—is expected to take a larger share of the housebuilding company if their bid succeeds. Patron’s prior relationship with Cala offers a strategic advantage, positioning the consortium favorably against Persimmon, a key player in the race.

Industry insiders revealed over the weekend that the takeover could exceed initial estimates, indicating a valuation on the higher end of the £1.2bn to £1.3bn range. However, Legal & General (L&G), Cala’s parent company, and their advisers at Rothschild are continuing talks with FTSE-100 housebuilder Persimmon. L&G remains optimistic about receiving a higher bid from the home construction giant.

An official announcement from L&G is expected later this week, bringing clarity to the heated competition between Sixth Street and Persimmon.

Strategic Shift at Legal & General

The sale of Cala comes as part of a broader restructuring strategy led by Antonio Simoes, the newly appointed CEO of L&G. Simoes, formerly of Santander and HSBC, is streamlining the company’s portfolio to focus on core operations and long-term growth. Cala’s divestiture fits into this broader initiative, marking one of several recent changes designed to simplify L&G’s business operations.

Housebuilding Sector Sees Increased M&A Activity

The potential Cala acquisition comes at a time of heightened activity in the UK’s housebuilding industry. Bellway, another major player, recently walked away from a bid to acquire Crest Nicholson. Meanwhile, Barratt Developments is finalizing a £2.5bn purchase of Redrow, signaling further consolidation in the market.

Both L&G and Rothschild have declined to comment on the specifics of the sale, while Sixth Street has yet to issue a public statement.

Meta Description: Legal & General is set to decide between American investor Sixth Street and UK-based Persimmon in a competitive race to acquire Cala, a housebuilder valued at £1.2bn. The deal is expected to close this week.