Beazer subsequently lodged an expression of interest, but the Persimmon offer was preferred on grounds of price, the commercial terms, the degree of readiness to complete and the shorter timetable, he claimed.Persimmon will receive a pounds 3m compensation fee if it fails to reach agreement on the offer. It is calling on shareholders for pounds 91m in a one-for-two rights issue to part-finance the Ideal acquisition, its first, but the market generally reacted well to the deal. We have a duty to our shareholders to do that.”Mr Watkins admitted that Beazer had not been included in the formal bid process for Ideal, which began after Trafalgar’s preliminary results were published on 15 December. Beazer said it was “evaluating the situation”.Its decision could turn on the value of tax losses being sold with Ideal. Neither Persimmon nor Trafalgar would give any indication as to their size, but sources suggest that Beazer might be prepared to add them to its original bid, thought to have been around pounds 160m.John Watkins, a Trafalgar director, said last night: “If Beazer want to make an improved offer they can do that and if they come up with something sufficiently interesting, we will talk to them. One option still open to Beazer would be an approach to the group’s main shareholders to get them to overturn yesterday’s agreement. But Beazer said yesterday it was “keeping its options open” after previously claiming it had been excluded by Trafalgar from negotiations to sell the business.
The deal, which would make the York-based Persimmon the UK’s fourth-biggest housebuilder, must be cleared by Trafalgar shareholders at an extraordinary general meeting on February 22.

The deal, to be partially paid for through a pounds 91m cash call, tops the pounds 160m which the rival Beazer Homes is thought to have been prepared to bid. David Bell, former chief executive of the Financial Times Group, will be responsible for information. Greg Dyke, former head of LWT and chief executive of Pearson Television, will have primary responsibility at board level for films and entertainment. David Veit, formerly assistant managing director, will handle other entertainment ventures.. An auction for Trafalgar House’s Ideal Homes subsidiary could begin in the next few days despite last night’s agreement by the house- builder Persimmon to pay pounds 170m for the business. The company’s three main lines of business will report to three senior executives. It also announced it would incur pounds 32m in additional restructuring costs, following changes to back-office systems.”They spent a fortune on management consultants to cut a few costs,” said one analyst.

“Most companies would have taken these charges long ago.”Analysts have been generally supportive of management changes, announced last week. City houses consequently lowered their estimates for 1995 to about pounds 240m, not counting a one-off gain of pounds 466m from the sale of Pearson’s 14 per cent stake in BSkyB, the satellite broadcaster. The two are partners in the new Channel 5 service.Pearson called in analysts in December to paint a downbeat picture of current trading. Pearson shares closed at 650p last night, toward the high end of analysts’ trading ranges.

It is believed the share price already includes a marginal bid premium.Granada’s interest came as little surprise to media analysts, who pointed out that Pearson has long had a reputation for sleepy management, and has only recently moved to reduce back-office costs following a two-year strategic shift from luxury goods and services to media.”Some of what they are doing now is clearly aimed at heading off a potential bid,” said one leading media analyst.There has also been speculation that Pearson and MAI, the financial services and media group headed by Lord Hollick, could merge their financial operations, in a move to preempt any break-up bid of either company. “Even Rupert Murdoch couldn’t do it with 20 per cent in his pocket.”Mr Murdoch made a run at the company in the late 1980s, eventually building a 20 per cent stake he later sold at a profit.Analysts said a bid would have made sense for Granada, but only at a maximium price of pounds 9, which Henderson Crosthwaite has calculated to be the maximum break-up value of the group. But analysts said most potential bidders would be put off by the family stake.”This is a very difficult company to take over, as others have already discovered,” a Pearson insider said. Granada spent seven months last year stalking Pearson, the media and financial services company, but abandoned a potential bid when it emerged that the Cowdray family would not accept an offer of up to pounds 9 a share. It is believed that Granada, which last week won a two-month battle for Forte, the hotels and restaurants concern, was preparing a break-up bid to secure Pearson’s range of media assets, which include Thames Television, the independent television production company, and Grundy Worldwide, makers of the soap, Neighbours.
At pounds 9 a share, Pearson would be worth just over pounds 5bn.