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Your support makes all the difference.Steve Morgan, the chairman of Redrow, triggered a rally in housebuilding shares yesterday as he tabled a £562m proposal to take the company he founded nearly 40 years ago private.
Mr Morgan – worth £410m and the owner of the Championship football club Wolverhampton Wanderers – already owns 40 per cent of Redrow, which he began in 1974. He is teaming up with Martin Hughes' Toscafund, owner of 14 per cent of the shares, as well as the private equity firm Penta Capital for the 152p a share bid.
The rare instance of M&A activity in a sector clawing its way back from recession and a lingering mortgage drought sent shares in Redrow and its rivals pushing higher yesterday. Redrow gained nearly 3 per cent to 155.1p, while Taylor Wimpey and the perennial takeover candidate Bovis Homes also made strong advances in the FTSE 250.
Mr Morgan's move is not a bolt from the blue after he returned to the board of the Flintshire-based firm three years ago to revive its fortunes. He increased his stake in May as the company raised £79.6m to fund Redrow's assault on the London market. Company-watchers said a rival bid was unlikely given the 54 per cent owned by the would-be buyers.
Panmure Gordon's analyst Rachael Applegate said: "In the current environment 152p is a fair price and Steve Morgan is pretty shrewd. I can't see him messing around with his offer. If I were a shareholder, I'd take it.
"He has made a lot of investment in land in London and the South-east and this (bid) may be borne out of frustration that it is not being reflected in the share price."
Mr Morgan's potential offer comes at a 24 per cent premium to the average Redrow share price in the past three months.
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