Barratt Developments PLC has announced a recommended all-share offer for the combination of Barratt and Redrow. The proposed acquisition will be carried out through a court-sanctioned scheme of arrangement of Redrow under Part 26 of the Companies Act. Under the terms of the combination, each Redrow shareholder will receive 1.44 new Barratt shares for each Redrow share, totaling approximately 476,309,153 new Barratt shares for Redrow shareholders. The terms imply a value of approximately £2,524 million for the entire issued and to be issued ordinary share capital of Redrow, representing a premium of approximately 27.2% to the closing price per Redrow share on 6 February 2024.

Following completion, Redrow shareholders will hold approximately 32.8% of the combined group, while Barratt shareholders will hold approximately 67.2%. The boards of both companies believe that the combination will create an exceptional UK homebuilder in terms of quality, service, and sustainability, accelerating the delivery of much-needed homes across the UK. They anticipate significant cost synergies, a robust balance sheet, and improved shareholder returns over the medium term.

The Barratt Directors and the Redrow Directors expect pre-tax cost synergies of at least £90 million on an annual run-rate basis by the end of the third year following completion, with the combination expected to be accretive to Barratt and Redrow's respective adjusted earnings per share in the first year after completion. Additionally, Steve Morgan, Redrow's founder, is supportive of the combination, and Barratt has received irrevocable undertakings to vote in favor of the scheme at the Court Meeting and the resolutions to be proposed at the Redrow General Meeting from Bridgemere Securities Limited, Steve Morgan's family investment vehicle.