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* Shareholder Schroder suggested merger - report
* Shares in Bovis rise 4.1 percent
* Strategic logic of a tie-up questioned
* Graphic on Bovis share price http://reut.rs/2i9O9Qp
By Costas Pitas
LONDON, Jan 23 (Reuters) - British housebuilders Bovis and Berkeley see little logic in a merger,sources close to the companies told Reuters, after a mediareport said an influential Bovis shareholder wrote to Berkeleyasking it to consider such a step.
A source close to Berkeley said there were better fits forBovis when asked about a report in The Sunday Times newspaperwhich said a fund manager at Schroder Investment Management had written to London-focused builder Berkeley asking itto consider an all-stock merger.
A source close to Bovis also saw little reason for thehousebuilders to merge.
"It is unlikely because the land market is so benign at themarket. You don't need to buy another housebuilder to get yourhands on land," the source told Reuters when asked about themedia report.
Bovis has been searching for a new permanent chief executivesince David Ritchie quit this month after the company warned onprofit in December, saying it had failed to complete the numberof homes it expected during the year.
Bovis shares rose 4.1 percent by 1512 GMT on Mondayfollowing the report but remain the weakest performers of themajor British housebuilders since Britons voted on June 23 toleave the European Union. Berkeley shares rose 2.6 percent.
Schroders, which holds a 6.4 percent stake in Bovis,according to analyst UBS, did not immediately respond to arequest for comment.
The source close to Berkeley said merger speculation wasinevitable given Bovis' underperformance in recent months but amerger would not be in keeping with Berkeley's past behaviour.
"Berkeley has never made a corporate acquisition of thisnature. There are a lot more strategic fits out there (forBovis) than Berkeley," the source said.
The Telegraph newspaper reported fellow housebuilders Redrow and Persimmon "could still be in the frame tobuy Bovis."
Both firms declined to comment.
Richard Marwood, a senior fund manager at Royal London AssetManagement, which invests in Berkeley, said he was not surprisedto hear talk of corporate activity around Bovis.
"Clearly, Bovis has had operational issues and it does tradeat one of the lowest prices to book in their sector, and sothere's maybe a view that if you could get what would beperceived to be better management running those assets, you'dmake more money," he told Reuters.
However, he said he was surprised Berkeley had beensuggested as a potential partner, given its focus on London andthe southeast of England.
The British property market has been generally resilientsince the Brexit vote, defying economists' predictions of adownturn.
The last major consolidation in the market occurred nearly adecade ago when companies Taylor Woodrow and George Wimpeymerged to form Taylor Wimpey, becoming Britain's biggesthousebuilder at the time.
In recent years, British housebuilders have reported risingprofits and gradually expanded output, benefiting fromgovernment schemes to support home ownership and a lack ofsupply which has pushed up prices. ($1 = 0.8023 pounds)
(Additional reporting by Simon Jessop; editing by Adrian Croft)
