Galliford Try has unveiled plans worth an estimated £1.075 billion to combine its housebuilding businesses with Bovis Homes.

The companies have reached preliminary agreement on high-level terms, which will see Linden Homes, Galliford Try Partnerships and Bovis Homes unite.

This combination will create a business with extensive geographic coverage and a strengthened housebuilding and partnerships operating platform.

The proposed deal has a cash element of £300m and a further transfer of a £100m private debt placing to Bovis. The remainder of the offer is a £675m share issue of new Bovis shares to existing Galliford Try shareholders on a pro rata basis.

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When finalised, the proposal will be taken forward for the approval of both sets of shareholders, with a view, if approved, to completing the transaction in the coming months.

Graham Prothero, Chief Executive of Galliford Try plc, commented: "The transaction is an exciting opportunity to create two strategically focused businesses. The significant cash element within the consideration provides a firm foundation for our newly reorganised Construction business to flourish as an independent company. The strong balance sheet and excellent fit between the combining businesses will be a superb platform for both private housebuilding and partnerships, creating a unique and well-positioned housing provider.

"Much remains to be done before we can present all the details to our shareholders and wider stakeholders. However, if completed, this deal will generate significant value for shareholders and a bright future for all three of our businesses."

(CM/MH)