A three-way bid battle could be set to ignite for housebuilder Wilson Bowden after it received approaches from a trio of rivals.
Offers have come in from George Wimpey, Redrow and Bellway, with further advances expected for the firm which has an estimated price tag of #2 billion.
HSBC has been hired by Wilson Bowden to oversee a sale after the company received a flood of informal approaches over the summer.
Last night the company acknowledged the approaches. It said: "The board can confirm that it is in preliminary discussions with a number of parties regarding a possible offer for the company.
"These discussions are at a very early stage and there can be no certainty they will lead to a formal offer being made for the issued share capital of the company. Further announcements will be made as and when appropriate."
Any sale could trigger to a windfall for the founder and chairman David Wilson, who together with his family owns 33 per cent of the business.
The Leicester-based company employs 100 people in Wolverhampton through its core David Wilson Homes Business.
It builds more than 400 homes a year in the region, with sites in Rubery, Tipton, Quarry Bank, Dudley, Essington in Staffordshire, Bournville, Black Heath, Edgbaston, and Coventry, while it also has a scheme in Leamington through its Wilson Bowden City Homes subsidiary.
The approaches were triggered after Mr Wilson appointed NM Rothschild in July to review his family's stake in the business.
Mr Wilson, aged 64, has built up a fortune estimated at #550 million since setting up the business with his father Albert in 1961, and was ranked number ten in this year's Birmingham Post Rich List. It is thought he has not yet decided whether to sell his holdings in the company, although any deal will depend upon his agreement.
Shares in the company have risen from under 200p in the 1980s to #18.31 today, valuing the firm at #1.7 billion.
An enlarged group would lead to the creation of the second biggest builder in Britain after Persimmon.
Reports at the weekend said preliminary financial information about Wilson Bowden had been requested by at least one of the potential buyers and confidentiality agreements had been signed.
It is expected that Ian Robertson, the group chief executive of Wilson Bowden, would stand down once a deal had been done.
George Wimpey has a market value of #2.1 billion, Redrow #996 million and Bellway #1.5 billion, and any purchase of Wilson Bowden – Britain's fifth biggest builder – could catapult the purchaser into the FTSE 100.
But other bidders could be interested in entering the fray, with HBOS known to have looked at buying the company two months ago following its #1.1 billion acquisition of retirement housebuilder McCarthy & Stone.
The bank is one of the biggest lender to the industry and is currently linked with Sir Tom Hunter's West Coast Capital in its #660 million approach for Crest Nicholson.
Solihull-based Taylor Woodrow could also enter the fray, but any move could be complicated by the changes of management as Iain Napier prepares to hand over to Ian Smith, the former boss of General Healthcare Group in the New Year.
But house building experts believe that Wimpey has the greatest need to conclude a deal because of possible write-downs in the value of its land holdings in America following the property downturn across the Atlantic.
Mergers and acquisitions have come into vogue again in the housebuilding sector because bidders are attracted by the strong cash-flow, historical undervaluations, and strong demand for new homes.