Travis and Galiform merger rumour

Published:  30 September, 2009

NORTHAMPTON: Rumours have been doing the rounds for some weeks that Travis Perkins chief executive, Geoff Cooper has kitchen cabinet manufacturer Galiform at the top of his shopping list, reports the Daily Mail.

Galiform's share price increased earlier this week following widespread buying based on speculation that the builders' merchant, and Wickes DIY retailer, Travis Perkins is lining up a takeover bid. It shares improved, up 351/2p to 8011/2p on the strength of Wolseley's gains.

Galiform trades as Howdens Joinery and has 450 depots in the UK and several in France. Noble, the brokers recently highlighted the group as a major recovery play in the retail sector, believing it is geared into a UK macro rebound.

Valued at around £475m, Galiform looks a "no brainer" acquisition for Travis Perkins, said the Daily Mail.

It said: "Travis's gearing stands at a conservative 36%, so there is plenty of scope for a spending spree. Kitchen DIY sales at Wickes have grown at double-digit levels, helped by the bankruptcy of MFI. Swallowing Howden would help lift the business to a new level, leaving it in great shape to make benefit from the recovery."

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