Troubled housebuilder Bovis Homes has pulled out of merger talks with Galliford Try, saying the construction firm’s proposals undervalued the business.

The New Ash Green-based company announced the rejection of the deal as it also revealed the appointment of former Galliford boss Greg Fitzgerald as its new chief executive.

He will take over on April 18, three months after previous chief executive David Ritchie quit following a surprise profit warning.

Galliford Try said talks with Bovis had been “largely constructive” but said it could not get an agreement on its all-share merger offer.

Bovis had been urged to pursue a tie up with rival housebuilder Redrow by investor London Asset Management, which owns a large number of shares in the Kent firm.

However, Redrow announced at the end of March it was not interested in making a better offer than its original cash and shares bid.

Bovis has been embroiled in controversy this year, with revelations it paid customers up to £3,000 to move into incomplete homes.

It has set aside £7 million for compensation claims and slashed construction targets by 10% to 15%.

New boss Mr Fitzgerald had spent more than 30 years at Galliford Try and retired from the company in 2014.

He is also a former non-executive director of the NHBC and is non-executive chairman at Ardent Hire Solutions and Baker Estates.

He said: “Bovis has a great brand, excellent people and a high quality land bank. I very much look forward to working with the management team to restore Bovis’ position as a leading housebuilder and deliver significantly improved returns to shareholders.”

Bovis chairman Ian Tyler said Mr Fitzgerald “brings a wealth of housebuilding experience and I am confident he will rapidly drive performance across the Bovis business”.

The appointment means interim chief Earl Sibley will resume his role as group finance director.