Australian construction giant Lend Lease has launched preliminary discussions to acquire Birmingham-based city living developer Crosby Homes in a £270 million deal.
Lend Lease, which built the Bluewater shopping centre in Kent, has lined up a deal to buy the firm, which numbers Symphony Court among its Midland developments.
Crosby, which has offices in Edgbaston, has built its reputation around city living, with Birmingham schemes including the Royal Arch development in the Mailbox and the Orion Building, a collaboration with fashion designer John Rocha in Navigation Street.
It spun off from its parent company Berkeley in an incentivised management buy-out in 2003.
The new Crosby management team were, as part of a £500,000 share deal funded by Berkeley, given seven years to achieve £450 million of operating cash flow, after which they would receive 50.01 per cent of the company.
But Berkeley, which would keep the remaining 49.99 per cent, kept the right to negotiate with potential buyers.
It said yesterday that it had received a number of approaches from interested buyers, including Lend Lease Corporation.
Berkeley would not reveal the identity of the other interested parties yesterday, but said it was in the preliminary stage of negotiations with Lend Lease, "which may or may not" lead to a sale of Crosby. Berkeley said the incentivised management buy-out had been a success, with operating cash flow of £74 million in the year to April 2004, the last figures which are available.
A spokesman for Berkeley said Crosby had continued to do very well.
He said: "We are delighted that Crosby is ahead of its business plan. It continues to be successfully executed."
Lend Lease is undertaking due diligence but it is understood that the deal to buy the Crosby regeneration specialist has been approved by the company's investment committee.
It is claimed that Berkeley aims to announce the exchange of contracts at its annual results meeting on June 24.
It is the latest example of a developer attempting to buy a housebuilder to cash in on the Government's ambitious plans to build more houses in the UK.
Last month property investor and developer Gerald Ronson was forced to walk away from a deal to buy housebuilder and regeneration specialist Crest Nicholson.
The Staffordshire firm refused to open up its books to Ronson's company, Heron International, because it said that its indicative offer of a maximum of £480 million was too low.
It is thought that the rationale behind the deal for Lend Lease is to strengthen its urban communities business, which is run by Keith Perry, in the North and the Midlands.
Crosby, which employs about 250 staff, sold more than 1,000 units and had a land bank of more than 5,000 plots last year, a rise of six per cent on the year before.
Berkeley chairman Roger Lewis would not comment on the details of a deal, but added: " When we restructured Crosby in 2003 we were effectively saying there was a 'for sale' sign on the company and if an offer came in at an appropriate level we would consider it.
"We are having some discussions."