January 25, 2021

Hands up for fresh effort to build future with Kier Living

December 02, 2020

Guy Hands, the private equity tycoon, has revived talks about a takeover of Kier Living, the London-listed construction group's housebuilding wing.

Sky News has learnt that Mr Hands has reopened talks with Kier's advisers about an acquisition of the business a year after he initially showed interest.

Sources said the financier's firm, Terra Firma Capital Partners, was among a small number of bidders for Kier Living, which has been designated non-core by the group's new management team.

The identity of other bidders for the division was unclear on Wednesday.

Analysts have pencilled in a valuation of approximately £100m for Kier Living - a sum almost equivalent to the debt-laden company's entire market capitalisation.

In September, Kier said it was examining another equity-raise alongside the auction of its housebuilding business.

"Kier Living is a strong business but has limited operational synergies with other parts of the group," it said at the time.

"There is a new management team in place who have reorganised the business into a smaller more cash-focused operation."

It added that the sale process was "now progressing, having been paused in light of COVID-19".

Last year, Kier replaced its chief executive with Andrew Davies, an experienced industry figure who had been due to take up the top job at Carillion shortly after it collapsed in January 2018.

Kier is a significant government contractor, with substantial infrastructure projects on its books including Crossrail, the HS2 rail link and the new nuclear power station at Hinkley Point.

Whitehall has been monitoring the health of Kier following criticism that it had done too little to prepare for the collapse of Carillion.

Mr Hands is best known for his ill-fated ownership of EMI, the music group, which ended up in a further set of legal disputes that he eventually walked away from.

Some of his investments have, nevertheless, proved to be extraordinarily lucrative.

Kier and Terra Firma declined to comment.

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