Legal & General buys CALA stake from Lloyds

Financial services giant Legal & General (L&G) has bought a large interest in a major British home builder from Lloyds Banking Group, marking the group's first direct investment of this kind.

Financial services giant Legal & General (L&G) has bought a large interest in a major British home builder from Lloyds Banking Group, marking the group's first direct investment of this kind.

L&G, which provides protection, annuities, savings and investment management products in the UK, said in a statement on Monday morning that it has bought a 46.5% equity stake in CALA Group for £65m.

Advertisement - Article continues below

Meanwhile, European real estate firm Patron Capital will be an equal partner with an identical interest, alongside management who will take a 7.0% share.

The acquisition, financed by £140m of equity and £70m of debt, values CALA at £210m.

L&G said that it has identified direct investments as a "key driver of growth": "The acquisition forms part of a strategy to target socially useful projects (including housing, education, transport and energy sectors) that deliver high rates of return and fit L&G's financial and strategic criteria," the company said.

CALA is said to have a premium market positioning in the more "affluent" areas of the UK such as the Home Counties, the Cotswolds and around Glasgow, Edinburgh and Aberdeen.

"At our preliminary results we identified direct investment as one of our five drivers of growth. We are delighted to announce an acquisition in this area as our first M&A transaction for some time. We will continue our evolution as a group by combining our strength in organic growth with selected bolt-on acquisitions, which satisfy our strategic and financial criteria, across each of the five areas identified," said L&G's M&A and Strategy Director Wadham Downing.

"We are very excited to have invested in CALA alongside Patron and CALA's experienced management team. We are confident that with this combined expertise and the financial resources that both Patron and L&G bring, we can build many more homes in the UK and help CALA grow and realise its potential."



Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Investment strategy

How John Maynard Keynes learned the folly of market timing

In an extract from his book The Sceptical Investor, John Stepek explains how the great economist John Maynard Keynes came a cropper when he first star…
25 May 2020
Emerging markets

A new lease of life for the Brics

Emerging markets are having a surprisingly good crisis. Their long-predicted rise will now continue.
24 May 2020

Battling volatility: The benefits of an active manager

SPONSORED CONTENT – Alastair Wilson, managing director of Close Brothers, on the advantages of active investing in times of crisis.
21 May 2020