The CEO of Taylor Morrison, the U.S. subsidiary of British home builder Taylor Wimpey, dismissed on Wednesday press reports in Britain that the parent company was considering a sale of the U.S. unit.
"It's absolutely unsubstantiated and an incorrect rumor that has hit the press," said Sheryl Palmer, CEO of Taylor Morrison.
Media reports in Great Britain have speculated that Taylor Wimpey is considering selling Taylor Morrison to raise capital to help bolster the company that is now facing a slow down in the U.K. as well as the U.S. The rumors popped up after Taylor Wimpey announced last week that its attempt to raise £500 million, or roughly $1 billion, from its current shareholders was unsuccessful. The company faces a potential breach of its loan covenants by the beginning of next year without an infusion of cash.
Taylor Wimpey's stock price has fallen as swiftly and as far as the home building market in the U.K., which was spared--until recently--the slowdown that has plagued the U.S. The company's market value dropped dramatically in the last year since it was created by the merger of two U.K.-based companies, Taylor Woodrow and George Wimpey. The stock on the London Stock Exchange closed at £0.30 per share Wednesday, far from the 52-week high of £3.70 per share.
While the U.K. market has been falling precipitously in the past few months, Taylor Wimpey CEO Peter Redfern told investors last week that he sees some signs the U.S. market may be stabilizing.
Palmer confirmed that. "I think he was very realistic when he said that," she said. "In the U.S., we have definitely had some pockets of demand...We have been able to find the right pricing in certain submarkets to allow for a good, even sales rate."
Those markets include small areas in Phoenix, Houston, and some parts of Florida, according to Palmer. "Nobody is naive enough to say that it is over, but we are actually ahead of our sales in some markets over last year," she said. "We are cautiously optimistic."