Tue 6 May 2008
Apollo fails in attempt to buy stake in Barratt
Apollo, the American private equity group, has reportedly had a bid, believed to be in the region of £400million, for a stake in Barratt Developments, rejected.Shares in Barratt, which currently has a market value of around £933.5 million, stood at 267.25p this afternoon, compared with a trading price of £11.26 this time last year. The company has been adversely affected by the credit crunch and the rapid slowdown in the housing market.
In recent weeks it’s been suggests that Barratt may have to conduct an emergency rights issue in order to raise money to overcome its existing debt burden. The company has around £1.7 billion of debt and is currently feeling the strain, as about £800 million needs refinancing by next April.
The company is attempting to lessen its debt pile through the sale of Wilson Bowden Developments, which it purchased last year for £2.2 billion, however, this alone may not be enough.
Apollo’s move to buy into Barratt could signal that the US group believes that the bottom of the market has been reached.
Barratt refuses to comment.
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